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Medicare Prescription Drug Benefit Manual
Chapter 6 – Part D Drugs and Formulary Requirements
Table of Contents
(Rev. 10, 02-19-10)
Transmittals for Chapter 6
10 - Definition of a Part D Drug
10.1 - General
10.2 - Covered Part D Drug
10.3 - Commercially Available Combination Products
10.4 - Extemporaneous Compounds
10.5 - Medical Supplies Associated with the Delivery of Insulin
10.6 - Medically-Accepted Indication
10.6.1 - Retrospective Determination of a Medically-Accepted Indication
10.7 - Drug Purchased in Another Country
10.8 - Drugs Used to Treat Opioid Dependence
10.9 - DESI Drugs
10.10 - Over-the-Counter Products (OTCs)
10.11 - Common Home Infusion Drugs
10.12 - Bundling of Home Infusion Drugs Under a Part C Supplemental Benefit
10.13 - Inhaler Supplies
10.14 - Vaccine Administration
10.14.1 - Elements of Vaccine Administration
10.14.2 - Establishment of Multiple Vaccine Administration Fees
10.14.3 - Other Vaccine Administration Considerations
20 - Part D Exclusions
20.1 - Excluded Categories
20.2 - Drugs Covered Under Medicare Part A or B
20.2.1 - Exhausted Part A Benefits
20.2.2 - Part D Sponsor Due Diligence in Prior Authorization of Part B Versus
Part D Coverage Determination
20.3 - Coverage of Supplemental Drugs Under Enhanced Alternative Coverage
20.4 - Application of General Exclusion Provisions
30 - Formulary Requirements
30.1 - Pharmacy and Therapeutics (P&T) Committee
30.1.1 - Membership
30.1.2 - Conflict of Interest
30.1.3 - P&T Committee Member Disclosure to CMS
30.1.4 - Meeting Administration
30.1.5 - Formulary Management
30.1.6 - Formulary Exceptions
30.1.7 - P&T Committee Role in Transition
30.2 - Provision of an Adequate Formulary
30.2.1 - Formulary Categories and Classes
30.2.1.1 - Application of Existing or New Drugs into the Current Version
of the USP Model Guidelines
30.2.2 - Formulary Benefit Management Tools
30.2.2.1 - Formulary Submission of “Safety-Related” Utilization
Management Edits
30.2.3 - Long-term Care Accessibility
30.2.4 - Specialty Tiers
30.2.5 - Protected Classes
30.2.6 - Submission of Multiple Formularies
30.2.7 - Formulary Performance and Content Review
30.2.8 - Formulary Submission Timeline
30.3 - Formulary Changes
30.3.1 - Limitation on Changes in Therapeutic Classification
30.3.2 - Limitation of Formulary Changes Prior to Beginning of Contract Year
30.3.3 - Midyear Formulary Changes
30.3.3.1 - Policy Regarding Formulary Changes
30.3.3.2 - Formulary Maintenance Changes
30.3.3.3 - Non-maintenance (Other) Formulary Changes
30.3.4 - Provision of Notice Regarding Formulary Changes
30.3.4.1 - Beneficiary Notice Requirements
30.3.4.2 - Notice for Other Entities
30.3.4.3 - Provision of Notice Regarding Safety-Related Formulary
Changes
30.3.4.4 - Notice Requirements for Pending Formulary Changes
30.3.5 - Formulary Change Notice in Advance of Upcoming Contract Year
30.4 - Transition
30.4.1 - Transition Requirements
30.4.2 - General Transition Process
30.4.3 - New Prescriptions Versus Ongoing Drug Therapy
30.4.4 - Transition Timeframes and Temporary Fills
30.4.4.1 - Timeframe and Transition Fills in the Outpatient Setting
30.4.4.2 - Timeframe and Transition Fills in the Long Term Care Setting
30.4.4.3 - Transition Extension
30.4.5 - Transition Across Contract Years
30.4.6 - Emergency Supply for Current Enrollees
30.4.7 - Level of Care Changes
30.4.8 - Edits for Transition Fills
30.4.9 - Cost-sharing Considerations
30.4.10 - Transition Notices
30.4.11 - Public Notice of Transition Process
30.5 - Provider and Patient Education
Appendix A - Common Acute Care Home Infusion Drugs
Appendix B - Part D Drugs/Supplemental Drugs Summary Table
Appendix C - Medicare Part B versus Part D Coverage Issues
Appendix D - The Most Commonly Prescribed Drug Classes for the Medicare Population
10 - Definition of a Part D Drug
(Rev. 2; Issued: 07-18-08; Effective/Implementation Date: 07-18-08)
Part D drugs are defined in Title XVIII of the Social Security Act (the Act) and in the regulations
(42 CFR 423.100). Part D sponsors are responsible for making appropriate coverage
determinations and ensuring that covered Part D drugs meet the requirements in this section.
10.1 - General
(Rev. 10, Issued: 02-19-10, Effective/Implementation Date: 03-01-10)
Subject to the exclusions specified in section 20 of this chapter, a Part D drug means a drug that
may be dispensed only upon a prescription, is being used for a medically-accepted indication as
defined by section 1927(k)(6) of the Act, and is one of the following:
A drug that is described in sections 1927(k)(2)(A)(i) through (iii) of the Act;
A biological product described in sections 1927(k)(2)(B)(i) through (iii) of the Act;
Insulin described in section 1927(k)(2)(C) of the Act;
Medical supplies associated with the delivery of insulin;
A vaccine licensed under section 351 of the Public Health Service Act and its
administration.
CMS considers it best practice for Part D sponsors to consider the proper listing of a drug
product with the FDA as a prerequisite for making a Part D drug coverage determination. The
FDA is unable to provide regulatory status determinations through their regular processes if a
drug product is not properly listed. Therefore, Part D sponsors should begin the drug coverage
determination process by confirming that a prescription drug product national drug code (NDC)
is properly listed with the FDA.
CMS interprets “dispensed only upon a prescription” as meaning a drug that is recognized by the
Food and Drug Administration as a prescribed drug requiring “Rx only” on its label per section
503(b)(4) of the Federal Food Drug and Cosmetic (FD&C)Act.
Additionally, Part D sponsors must recognize a physician‟s authority to delegate prescribing
where authorized by State law. Generally, in retail pharmacy, standing orders and protocols are
methods used by physicians to delegate and define their prescribing authority to non-physician
providers such as pharmacists. Standing orders are typically pre-approved documents for a
specific drug or vaccine, contain a set of required clinical criteria and permit administration of
the drug without physician examination, as long as the required clinical criteria are met. A
protocol is similar to a standing order but is generally broader in scope and may include multiple
drugs and extensive clinical criteria. When these and other recognized delegation tools are used
in accordance with Federal and State laws, the Part D requirement of “upon a prescription” will
be satisfied.
10.2 - Covered Part D Drug
(Rev. 2; Issued: 07-18-08; Effective/Implementation Date: 07-18-08)
A covered Part D drug is a Part D drug that is included in a Part D sponsor‟s formulary, or
treated as being included in a Part D plan‟s formulary as a result of a coverage determination or
appeal under 42 CFR 423.566, 423.580, and 423.600, 423.610, 423.620 and 423.630, and
obtained at a network pharmacy or an out-of-network pharmacy in accordance with 42 CFR
423.124.
10.3 - Commercially Available Combination Products
(Rev. 2; Issued: 07-18-08; Effective/Implementation Date: 07-18-08)
Commercially available combination prescription drug products that contain at least one Part D
drug component are Part D drugs when used for a “medically-accepted” indication, unless CMS
makes the determination that such product, as a whole, belongs in one of the categories of drugs
excluded from coverage under Part D. If CMS has not provided guidance to exclude a specific
combination product, such combination product, so long as it contains at least one Part D drug
component, should be considered a Part D drug (unless it is excluded from coverage under Part
D for another reason).
10.4 - Extemporaneous Compounds
(Rev. 2; Issued: 07-18-08; Effective/Implementation Date: 07-18-08)
Compounded prescription drug products can contain: (1) all Part D drug product components; (2)
some Part D drug product components; or (3) no Part D drug product components. Only costs
associated with those components that satisfy the definition of a Part D drug are allowable costs
under Part D because the compounded products as a whole do not satisfy the definition of a Part
D drug.
The labor costs associated with mixing a compounded product that contains at least one Part D
drug component can be included in the dispensing fee (as defined in 42 CFR 423.100).
For compounds containing all generic products, the generic cost-sharing should be applied. If a
compound contains any brand name products, the Part D sponsor may apply the higher brand
name cost-sharing to the entire compound.
10.5 - Medical Supplies Associated with the Delivery of Insulin
(Rev. 2; Issued: 07-18-08; Effective/Implementation Date: 07-18-08)
Medical supplies directly associated with delivering insulin to the body, including syringes,
needles, alcohol swabs, gauze, and insulin injection delivery devices not otherwise covered
under Medicare Part B, such as insulin pens, pen supplies, and needle-free syringes, can satisfy
the definition of a Part D drug. However, test strips, lancets and needle disposal systems are not
considered medical supplies directly associated with the delivery of insulin for purposes of
coverage under Part D.
Insulin syringes equipped with a safe needle device, in their entirety (syringe and device), are
also Part D drugs and should be managed like any other Part D drug the sponsor places on its
formulary. Part D sponsors must make safety enabled insulin syringes available on their
formularies for all of their institutionalized beneficiaries.
10.6 - Medically-Accepted Indication
(Rev. 2, Issued: 07-18-08; Effective/Implementation Date: 07-18-08)
Section 1860D-2(e)(1)(B) of the Act limits “medically-accepted indication,” by reference to
section 1927(k)(6) of the Act, to any use of a covered Part D drug which is approved under the
Federal Food, Drug, and Cosmetic Act, or the use of which is supported by one or more citations
included or approved for inclusion in any of the compendia described in section 1927(g)(1)(B)(i)
of the Act. The compendia are:
I. American Hospital Formulary Service Drug Information,
II. DRUGDEX Information System, and
III. United States Pharmacopeia-Drug Information (or its successor publications).1
Part D sponsors are responsible for ensuring that covered Part D drugs are prescribed for
“medically-accepted indications.” Part D sponsors may rely on utilization management policies
and procedures to make such determinations but pharmacists are not required to contact each
prescriber to verify whether a prescription is being used for other than a medically-accepted
indication.
“Medically-accepted indication” refers to the diagnosis or condition for which a drug is being
prescribed, not the dose being prescribed for such indication. Part D sponsors may have dose
limitations based on FDA labeling, but an enrollee may request (and be granted) an exception to
a dose restriction through the formulary exception process based on medical necessity criteria.
Additionally a Part D drug must be used for a medically-accepted indication that facilitates the
diagnosis or treatment of illness or injury or to improve the functioning of a malformed body
member (except for Part D vaccines). Consequently, if a drug works on medical equipment or
devices and is not used for a medically-accepted indication of therapeutic value on the body, it
cannot satisfy the definition of a Part D drug. For example, a heparin flush is not used to treat a
patient for a medically-accepted indication, but rather to dissolve possible blood clots around an
infusion line. Therefore, heparin‟s use in this instance is not therapeutic but is, instead,
necessary to make durable medical equipment work. It would therefore not be a Part D drug
when used in a heparin flush.
10.6.1 - Retrospective Determination of a Medically-Accepted Indication
(Rev. 2, Issued: 07-18-08; Effective/Implementation Date: 07-18-08)
1
CMS is considering whether to establish a process for identifying successor publications for purposes of Section
1927(g)(1(B)(i) and will provide further notification of any decision to establish such a process.
Part D sponsors may retrospectively identify and confirm – either as part of their retrospective
review programs required under 42 CFR 423.153, or incident to another utilization management
review – that a dispensed drug was not prescribed for a medically-accepted indication for a
particular individual (see the example below, in which this occurred because a dosage issue
resulted in the case being flagged).
Example: An individual receives a prescription and takes a drug within a common
dosing regimen (i.e., one tablet daily). Several months later, that individual‟s physician
writes a new prescription for an increased dosage of that drug. The second prescription
triggers a quantity limit (for example, based on safety limits) and, as a result, the
individual‟s physician submits evidence to support an exception to the quantity limit.
Based on that evidence, the Part D sponsor makes a determination that the drug was not
prescribed for a medically-accepted indication.
When it was not reasonable to expect a Part D sponsor to require prior authorization to ensure a
drug is being used for an accepted medical indication, CMS would not expect the sponsor to
recover payments made to pharmacies or attempt to obtain reimbursement from enrollees.
However, Part D sponsors must send notice of coverage determination decisions to affected
enrollees (i.e., those for whom a coverage determination is made based on lack of evidence of a
medically-accepted indication) in accordance with the rules provided in 42 CFR 423.566 through
423.576. Such notification must include the following information:
The name of the affected covered Part D drug,
The reason why the Part D sponsor is no longer covering the drug for the member,
Alternative drugs on the Part D sponsor‟s formulary, and expected cost-sharing for those
drugs, and
The enrollee‟s right to a redetermination.
CMS expects a Part D sponsor to consider the enrollee‟s health situation, and continue to cover
the drug to the extent it determines that doing so is necessary to avoid risk to the enrollee‟s
health while providing for a transition to another form of treatment.
10.7 - Drug Purchased in Another Country
(Rev. 2, Issued: 07-18-08; Effective/Implementation Date: 07-18-08)
Part D sponsors must exclude Part D drugs from qualified prescription drug coverage if they are
not used and sold in the United States. In addition, Part D sponsors may only pay for drugs that
satisfy the definition of Part D drug. In general, such definition requires FDA approval for sale
in the United States. Therefore, even if the manufacturer has FDA approval for a drug, the
version produced for foreign markets usually does not meet all of the requirements of the U.S.
approval, and thus it is considered to be unapproved.
10.8 - Drugs Used to Treat Opioid Dependence
(Rev. 2, Issued: 07-18-08; Effective/Implementation Date: 07-18-08)
Part D sponsors must include coverage for Part D drugs, either by formulary inclusion or via an
exception, when medically necessary for the treatment of opioid dependence. Coverage is not
limited to single entity products such as Subutex®, but must include combination products when
medically necessary (e.g., Suboxone®). For any new enrollees, CMS requires sponsors to have
a transition policy to prevent any unintended interruptions in pharmacologic treatment with Part
D drugs during their transition into the benefit. This transition policy, along with CMS‟ nonformulary exceptions/appeals requirements, should ensure that all Medicare enrollees have
timely access to their medically necessary Part D drug therapies for opioid dependence.
A Part D drug is defined, in part, as “a drug that may be dispensed only upon a prescription.”
Consequently, methadone is not a Part D drug when used for treatment of opioid dependence
because it cannot be dispensed for this purpose upon a prescription at a retail pharmacy.
(NOTE: Methadone is a Part D drug when indicated for pain). State Medicaid Programs may
continue to include the costs of methadone in their bundled payment to qualified drug treatment
clinics or hospitals that dispense methadone for opioid dependence.
10.9 - DESI Drugs
(Rev. 2, Issued: 07-18-08; Effective/Implementation Date: 07-18-08)
For a drug to be available for reimbursement by a Part D sponsor it must meet the definition of a
Part D drug. Section 1860D–2(e)(1) of the Social Security Act (the Act) generally defines a Part
D drug to include those drugs that may be dispensed only upon a prescription and that meet the
requirements of section 1927(k)(2) of the Act. Section 1927(k)(2) generally requires that the
drug be approved by the FDA or otherwise described under sections 1927(k)(2)(A)(ii) or (A)(iii)
of the Act. These provisions address those drugs affected by the Drug Amendments of 1962
(amending the Federal Food, Drug & Cosmetic Act), which require that a new drug be proven
effective, as well as safe. FDA‟s Drug Efficacy Study Implementation (DESI) evaluates the
effectiveness of those drugs that had been previously approved on safety grounds alone. FDA
indicates that these drugs, and those identical, related, and similar to them, may continue to be
marketed until the administrative proceedings evaluating their effectiveness have been
concluded, at which point continued marketing is permitted only if a new drug application
(NDA) or abbreviated new drug application (ANDA) is approved. The vast majority of the
DESI proceedings have been concluded, but a few are still pending.
The definition of a Part D drug does not include less than effective (LTE) DESI drugs or those
identical, related or similar drugs to the LTE DESI drug. As FDA continues to undertake
reviews under the DESI program and announces results of its hearings, CMS would expect Part
D sponsors to adjust their formularies accordingly, as they should with any other applicable FDA
drug product announcement. If a sponsor discovers the presence of any LTE DESIs on its
formulary based on an FDA announcement or otherwise, it should remove these drugs from the
formularies on accordance with section 30.3.2
10.10 - Over-the-Counter Products (OTCs)
(Rev. 2, Issued: 07-18-08; Effective/Implementation Date: 07-18-08)
The definition of a Part D drug does not include OTCs. Therefore, Part D sponsors cannot cover
OTCs under their basic prescription drug benefit or as a supplemental benefit under enhanced
alternative coverage. However, CMS will allow Part D sponsors the option to provide OTCs as
part of their administrative costs structure. Refer to chapter 7, section 60, of this manual for
further discussion of this option.
When an existing formulary product switches to an OTC status during the contract year, any
existing inventory of the previous legend product (manufactured under the legend New Drug
Application (NDA) and possessing the legend National Drug Code (NDC) number) will continue
to satisfy the Part D drug definition. Given the potential for beneficiaries requiring conversion to
other therapeutically equivalent legend products, CMS strongly recommends immediate
notification of affected enrollees using the notification criteria outlined in section 30.3.4. CMS
will direct sponsors to remove the converted legend product from their formulary at the next
formulary submission window after the OTC product becomes available.
Providing the OTC product at no cost to beneficiaries, as outlined in chapter 7, section 60, of this
manual, will not satisfy CMS‟ formulary requirements and Part D sponsors may need to add
additional drugs when the OTC is removed from its formulary. However, adjudication of the
legend product may continue as long as the market holds residual inventory.
10.11 - Common Home Infusion Drugs
(Rev. 2, Issued: 07-18-08; Effective/Implementation Date: 07-18-08)
CMS has identified a list of acute care drugs that are most commonly utilized in the home
infusion setting. The use of these drugs or drug classes often results in an earlier hospital
discharge and reduced healthcare costs. Rapid access to these agents is imperative for these
health care transitions. It is CMS‟ expectation that Part D sponsors will not implement policies
that could potentially delay or restrict beneficiary access to these important agents. In general,
should prior authorization or other utilization management edits apply to any of these agents,
CMS would expect that Part D sponsors handle these in an expedited manner in order to
facilitate hospital discharge in appropriate time frames. In addition, it is CMS‟ expectation that
Part D sponsors ensure appropriate beneficiary access to these drugs or drug classes via
formulary inclusion. See Appendix A for a list of commonly utilized home infusion drugs.
10.12 - Bundling of Home Infusion Drugs Under a Part C Supplemental
Benefit
(Rev. 10, Issued: 02-19-10, Effective/Implementation Date: 03-01-10)
2
If, based on an FDA announcement, a Part D sponsor recognizes and removes a non-Part D drug from its
formulary; CMS expects that Part D sponsors will provide 60 days of advance notice of the formulary removal.
Part D sponsors that offer Medicare Advantage (MA) prescription drug plans may choose to
provide Part D home infusion drugs as part of a bundled service as a mandatory supplemental
benefit under Part C, provided the sponsor consistently applies the option (i.e., in a given
contract year, the plan either always covers a particular home infusion drug as part of a bundled
service under Part C, or always covers a particular home infusion drug under Part D). Given
uniform benefits requirements, sponsors electing this option must also ensure that the bundled
service is available to all enrollees of any MA-PD or cost plan in which it chooses to provide
Part D home infusion drugs as a mandatory supplemental benefit under Part C. In addition,
plans electing this option must ensure that the bundle of services (which includes both infusion
drugs and the services and supplies associated with infusion drugs) is available to all plan
enrollees -- including those residing in long-term care facilities -- as a mandatory supplemental
benefit under Part C.
Interested Part D sponsors must appropriately assign these costs to the Part C component of their
bids to account for these bundled drugs. They must also provide, through the Formulary
Submission module, a file that clearly identifies the Part D home infusion drugs that will be
offered as part of a mandatory supplemental benefit under Part C for the following contract year.
CMS will review sponsors’ home infusion drug files as part of our formulary review process to
ensure that only home infusion drugs are included as part of the Part C supplemental benefit.
Effective with contract year 2010, CMS waives the definition of a Part D drug at 42 CFR
423.100 with respect to Part D drugs covered as part of a bundled benefit under a Part C
supplemental benefit. Waiver of the definition of a Part D drug will improve benefit
coordination of home infusion therapy between Parts C and D, particularly since the services
and supplies necessary for home infusion are never covered under Part D but would be provided
as part of a bundle of service under a Part C mandatory supplemental benefit. However, this
waiver is conditioned on the application of zero cost sharing for the bundle of home infusion
services provided under a Part C supplemental benefit. Thus, sponsors will not qualify for the
waiver and, in turn, will not qualify to cover Part D home infusion drugs as part of a bundle of
services under a Part C supplemental benefit without indicating on their Plan Benefit Packages
(PBPs) that the applicable cost sharing for this bundle of services is $0.
In addition, the requirement that Part D sponsors‟ formularies include at least two Part D drugs
that are not therapeutically equivalent and bioequivalent in each category and class of covered
Part D drugs – except where a particular category or class includes only one Part D drug – at 42
CFR 423.120(b)(2)(i) is waived for Part D sponsors for applicable formulary categories or
classes when Part D home infusion drugs are provided as part of a bundled service as a
mandatory supplemental benefit under Part C. Waiver of the requirement at 42 CFR
423.120(b)(2)(i) will allow Part D sponsors choosing to provide Part D home infusion drugs as a
part of bundled service under a Part C mandatory supplemental benefit to improve benefit
coordination of home infusion therapy between Part C and Part D. This improved benefit
coordination promotes continuity of care and cost avoidance of more expensive institutional care
by facilitating continuous access to home infusion drugs, as well as the costs of administration
and supplies associated with that therapy.
Part D sponsors choosing to provide Part D home infusion drugs as part of a bundled service
must indicate on their marketed formularies that certain drugs may be covered under the
sponsor‟s medical, rather than its prescription, benefit. For more information, consult the model
formulary available at:
http://www.cms.hhs.gov/PrescriptionDrugCovContra/PartDMMM/list.asp#TopOfPage.
10.13 - Inhaler Supplies
(Rev. 2, Issued: 07-18-08; Effective/Implementation Date: 07-18-08)
The definition of a Part D drug includes a drug that is described in section 1927(k)(2)(A)(i) of
the Social Security Act. This section specifically defines a “covered outpatient drug” as one that
is approved for safety and effectiveness as a prescription drug under section 505 of the Federal
Food, Drug, and Cosmetic Act, which requires submission by the manufacturer of an NDA or
ANDA.
In general, only those accessories for meter dose inhalers (MDIs), Dry Powder Inhalers (DPIs),
or Nasal Spray Inhalers (NS) that are included on the NDA or ANDA, listed on the package
insert, and specifically packaged with the drug product itself are eligible to meet the definition of
a Part D drug. If the accessories (i.e., actuator, chamber) are sold separately or are not included
on the drug product‟s NDA or ANDA, they would not meet the definition of a Part D drug.
10.14 - Vaccine Administration
(Rev. 2, Issued: 07-18-08; Effective/Implementation Date: 07-18-08)
Beginning on January 1, 2008, the Part D program will cover vaccine administration costs
associated with Part D vaccines. CMS interprets this statutory requirement to mean that the Part
D vaccine administration costs are a component of the negotiated price for a Part D-covered
vaccine. In other words, the negotiated price for a Part D vaccine will be comprised of the
vaccine ingredient cost, a dispensing fee (if applicable), and a vaccine administration fee. This
interpretation recognizes the intrinsic linkage that exists between the vaccine and its
corresponding administration, since a beneficiary would never purchase a vaccine without the
expectation that it would be administered.
In general, CMS believes that Part D vaccines, including the associated administration costs,
should be billed on one claim for both in- and out-of-network situations. For example, if an innetwork pharmacy dispenses and administers the vaccine in accordance with State law, the
pharmacy would process a single claim to the Part D sponsor and collect from the enrollee any
applicable cost-sharing on the vaccine and its administration. Alternatively, if a vaccine is
administered out-of-network in a physician‟s office, the physician would provide the vaccine and
its administration and then bill the beneficiary for the entire charge, including all components.
The beneficiary would, in turn, submit a paper claim to the Part D sponsor for reimbursement for
both the vaccine ingredient cost and administration fee.
10.14.1 - Elements of Vaccine Administration
(Rev. 2, Issued: 07-18-08; Effective/Implementation Date: 07-18-08)
Vaccine administration fees should be subject to negotiations between Part D sponsors and
pharmacies. CMS expects that sponsors will take into consideration the elements reflected in
existing Part B vaccine administration fees when establishing their own vaccine administration
fees. For example, Part B considers the immunizing professional‟s time in physically delivering
the vaccine to a beneficiary, the resources encompassing the supplies (syringe, gauze, band-aid,
alcohol prep pad, etc.), the indirect costs of the office, and professional liability.
10.14.2 - Establishment of Multiple Vaccine Administration Fees
(Rev. 2, Issued: 07-18-08; Effective/Implementation Date: 07-18-08)
Part D sponsors will have the discretion to implement either a single vaccine administration fee
for all vaccines or multiple administration fees based on type of vaccine, variance in provider
type, and product administration complexity. CMS plans to retrospectively review vaccine
administration fees to look for outliers and potentially discriminatory practices that would impact
beneficiary access to Part D vaccines.
10.14.3 - Other Vaccine Administration Considerations
(Rev. 2, Issued: 07-18-08; Effective/Implementation Date: 07-18-08)
Part D sponsors may implement drug utilization management tools to determine if a vaccine is
necessary; however, in the absence of any information showing previous immunization (i.e.,
claims data), the Part D sponsor should make payment available for a vaccine and its
administration consistent with Advisory Committee on Immunization Practices (ACIP)
recommendations.
20 - Part D Exclusions
(Rev. 2, Issued: 07-18-08; Effective/Implementation Date: 07-18-08)
20.1 - Excluded Categories
(Rev. 2, Issued: 07-18-08; Effective/Implementation Date: 07-18-08)
Part D drugs do not include drugs or classes of drugs, or their medical uses, which may be
excluded from coverage or otherwise restricted under section 1927(d)(2) of the Act, except for
smoking cessation agents.
Excluded:
Agents when used for anorexia, weight loss, or weight gain (even if used for a noncosmetic purpose (i.e., morbid obesity)).
Agents when used to promote fertility.
Agents when used for cosmetic purposes or hair growth.
Agents when used for the symptomatic relief of cough and colds.
Prescription vitamins and mineral products, except prenatal vitamins and fluoride
preparations.
Nonprescription drugs.
Covered outpatient drugs which the manufacturer seeks to require as a condition of sale
that associated tests or monitoring services be purchased exclusively from the
manufacturer or its designee.
Barbiturates.
Benzodiazepines.
Agents when used for the treatment of sexual or erectile dysfunction (ED). ED drugs will
meet the definition of a Part D drug when prescribed for medically-accepted indications
approved by the FDA other than sexual or erectile dysfunction (such as pulmonary
hypertension). However, ED drugs will not meet the definition of a Part D drug when
used off-label, even when the off label use is listed in one of the compendia found in
section 1927(g)(1)(B)(i) of the Act: American Hospital Formulary Service Drug
Information, United States Pharmacopeia-Drug Information (or its successor
publications), and DRUGDEX Information System.
Not Excluded:
Prescription drug products that otherwise satisfy the definition of a Part D drug are Part D
drugs when used for AIDS wasting and cachexia due to a chronic disease, if these
conditions are medically-accepted indications as defined by section 1927(k)(6) of the Act
for the particular Part D drug. Specifically, CMS does not consider such prescription
drug products being used to treat AIDS wasting and cachexia due to a chronic disease as
either agents used for weight gain or agents used for cosmetic purposes.
Part D drugs indicated for the treatment of psoriasis, acne, rosacea, or vitiligo are not
considered cosmetic.
Vitamin D analogs such as calcitriol, doxercalciferol, paricalcitol and dihydrotachysterol,
when used for a medically-accepted indication as defined by section 1927(k)(6) of the
Act, are not excluded because CMS interprets the exclusion of prescription vitamin D
products as being limited to products consisting of ergocalciferol (vitamin D2) and/or
cholecalciferol (vitamin D3).
Prescription-only smoking cessation products.
Prescription Niacin Products (Niaspan, Niacor).
Cough and cold medications are eligible to meet the definition of a Part D drug in
clinically relevant situations other than those of symptomatic relief of cough and colds.
For example, when cough medications are used for a medically-accepted indication that
treats a cough produced by a medical condition unrelated to symptomatic cough and cold.
In such circumstances, such as the treatment of cough to alleviate bronchospasm in
asthma, CMS does not consider these cough medications as excluded drugs.
See Appendix B for further clarification of Part D coverage or non-coverage of specific
products/drugs/drug categories.
20.2 - Drugs Covered Under Medicare Part A or B
(Rev. 2, Issued: 07-18-08; Effective/Implementation Date: 07-18-08)
Part D specifies that a drug prescribed to a Part D eligible individual cannot be considered a
covered Part D drug if payment for such drug „„...is available (or would be available but for the
application of a deductible) under part A or B for that individual.‟‟ CMS interprets this to mean
that if payment could be available under Part A or Part B to the individual for such drug, then it
will not be covered under Part D. Consequently, drugs covered under Parts A and B are
considered available (and excluded from Part D) if a beneficiary chooses not to pay premiums or
if a beneficiary has enrolled in Part B but that coverage has not yet taken effect.
See Appendix C for further explanation and clarification of specific issues regarding coverage
under Medicare Part B.
20.2.1 - Exhausted Part A Benefits
(Rev. 2, Issued: 07-18-08; Effective/Implementation Date: 07-18-08)
The issue of applicability of Part D coverage has also arisen in the context of inpatients in acute
care hospital settings (including long-term care (LTC) hospitals, which are certified as acute care
hospitals) who have exhausted their Part A inpatient stay benefit, but who require and continue
to receive a level of care that qualifies them for a Part A inpatient stay.
Drugs provided in an inpatient setting to an individual who has exhausted his or her lifetime
inpatient hospital benefit under Part A are not drugs that could be covered under Part A for that
individual. Unlike a beneficiary who, for example, chooses not to buy into Part B, there is no
way for an individual who has exhausted his or her Part A inpatient stay benefit to obtain
coverage under Part A for his or her drugs; therefore, Part D coverage may be available to a Part
D enrollee who has exhausted his or her Part A inpatient stay benefit and who remains in that
inpatient setting (provided the drug would otherwise be covered under Part D). See chapter 5,
section 50.5.4, regarding sponsor contracting requirements when a beneficiary has exhausted
inpatient Part A benefit days.
20.2.2 - Part D Sponsor Due Diligence in Prior Authorization of Part B Versus
Part D Coverage Determination
(Rev. 2, Issued: 07-18-08; Effective/Implementation Date: 07-18-08)
Part D sponsors may rely upon physician information included with the prescription, such as
diagnosis information (e.g., to determine whether the prescription is related to a Medicare
covered transplant) or location of administration (e.g., to determine if the prescription is being
dispensed for a beneficiary in a nursing home) to the same extent they rely on similar
information acquired through documentation from physicians on prior authorization forms.
Assuming the indication on the script is sufficient to make the coverage determination, there is
no need in such cases to require additional information to be obtained from the physician.
To the extent that the Part D sponsor requires its contracted pharmacies to report the information
provided on the prescription to assist in the determination of Part B versus Part D coverage, the
sponsor may rely on the pharmacist‟s report of appropriate information to make the coverage
determination under Part D. For example, for cases in which prednisone is prescribed for a
condition other than immunosuppression secondary to a Medicare-covered transplant, and this is
indicated on the prescription, a sponsor may cover the drug under Part D without seeking further
information from the prescribing physician.
This clarification should not be construed to indicate that a Part D sponsor may not impose prior
authorization or other procedures to ensure appropriate coverage under the Medicare drug
benefit. The Part D sponsor is ultimately responsible for making the initial Part D coverage
determination. However, CMS believes that the sponsor will have met appropriate due diligence
standards without further contacting a physician if necessary and sufficient information is
provided on the prescription, and the contracted pharmacy is able to communicate this
information to the sponsor in order to make the coverage determination.
CMS encourages industry trade collaboration with Part D sponsors to streamline Part B vs. Part
D coverage determinations. For instance, CMS has received comments recommending that as
Part D sponsors learn of a beneficiary‟s transplant status they record this in an electronic
database which could be shared with subsequently enrolled Part D sponsors minimizing data
collection and speeding appropriate coverage determinations. CMS also encourages further
utilization of locator codes in claims for long term care beneficiaries who are ineligible for Part
B drugs under the durable medical equipment benefit based on their place of residence.
20.3 - Coverage of Supplemental Drugs Under Enhanced Alternative
Coverage
(Rev. 2, Issued: 07-18-08; Effective/Implementation Date: 07-18-08)
A Part D sponsor may include coverage of drugs that would meet the definition of a Part D drug
but for the application of section 20.1 (these are known as “supplemental drugs,” as provided in
section 10.2 of chapter 5 of this manual) as a supplemental benefit under enhanced alternative
coverage.
20.4 - Application of General Exclusion Provisions
(Rev. 2, Issued: 07-18-08; Effective/Implementation Date: 07-18-08)
In accordance with section 1860D-2(e)(3) of the Act, a Part D sponsor may exclude from
qualified prescription drug coverage any Part D drug:
For which payment would not be made if items and services are not reasonable and
necessary for the diagnosis or treatment of illness or injury or to improve the functioning
of a malformed body member (except for Part D vaccines); or
Which is not prescribed in accordance with the Part D sponsor.
Such exclusions are coverage determinations subject to reconsideration and appeal.
Unlike other Part D drugs that may be excluded when not reasonable and necessary for the
diagnosis or treatment of illness or injury or to improve the functioning of a malformed body
member, Part D vaccines may only be excluded when their administration is not reasonable and
necessary for the prevention of illness.
30 - Formulary Requirements
(Rev. 2, Issued: 07-18-08; Effective/Implementation Date: 07-18-08)
A Part D sponsor that uses a formulary under its qualified prescription drug coverage must meet
requirements for the following:
Pharmacy and Therapeutics committee;
Provision of an adequate formulary;
Transition process;
Limitation on changes in therapeutic classification;
Provision of notice regarding formulary changes;
Limitation of formulary changes prior to beginning of contract year;
Provider and patient education; and
Formulary changes during the contract year.
30.1 - Pharmacy and Therapeutics (P&T) Committee
(Rev. 2, Issued: 07-18-08; Effective/Implementation Date: 07-18-08)
A Part D sponsor‟s formulary must be developed and reviewed by a P&T committee that meets
specific requirements with respect to:
Membership;
Conflict of interest;
P&T member disclosure to CMS;
Meeting administration;
Formulary management;
Formulary exceptions; and
P&T committee role.
30.1.1 - Membership
(Rev. 2, Issued: 07-18-08; Effective/Implementation Date: 07-18-08)
Part D sponsors‟ P&T committee membership must satisfy the following requirements:
P&T committee members must come from various clinical specialties that adequately
represent the needs of sponsors‟ enrollees.
A majority of the P&T committee members must be practicing physicians, practicing
pharmacists or both.
At least one P&T committee practicing pharmacist and one practicing physician must be
an expert in the care of elderly or disabled persons.
At least one P&T committee practicing pharmacist and one practicing physician must be
independent and free of conflict with respect to the Part D sponsor and pharmaceutical
manufacturers. Such P&T committee members may have certain non-employee
relationships with pharmaceutical manufacturers (for example consulting, advisory, or
research relationships) and still be considered independent and free of conflict provided
those relationships do not constitute significant sources of income and they do not
otherwise have a conflict of interest that would compromise their independence. In
addition, panel providers in a staff model HMO may be considered independent and free
of conflict to the extent that any remuneration received from a Part D sponsor is limited
to his or her clinical responsibilities for the care of plan enrollees.
30.1.2 - Conflict of Interest
(Rev. 2, Issued: 07-18-08; Effective/Implementation Date: 07-18-08)
P&T committee members should sign a conflict of interest statement revealing economic or
other relationships with entities affected by drug coverage decisions that could influence
committee decisions.
30.1.3 - P&T Committee Member Disclosure to CMS
(Rev. 2, Issued: 07-18-08; Effective/Implementation Date: 07-18-08)
In the event the Part D sponsor has entered into a confidential agreement such that the Pharmacy
Benefits Manager (PBM) will not disclose its P&T committee membership to the Part D sponsor,
then it is the Part D sponsor‟s responsibility to notify CMS that this information will be
submitted by the sponsor‟s PBM. Moreover, the Part D sponsor must ensure that the PBM
notifies CMS of the P&T committee membership. The Part D sponsor maintains ultimate
responsibility for adhering to and otherwise fully complying with all terms and conditions of its
contract and the sponsor must ensure that the PBM notifies the sponsor that this information has
been successfully submitted to CMS.
30.1.4 - Meeting Administration
(Rev. 2, Issued: 07-18-08; Effective/Implementation Date: 07-18-08)
The Part D sponsor‟s P&T committee should meet on a regular basis, but no less than quarterly.
P&T committee decisions regarding formulary development or revision must be documented in
writing.
30.1.5 - Formulary Management
(Rev. 2, Issued: 07-18-08; Effective/Implementation Date: 07-18-08)
Part D sponsor‟s P&T committee will consider the following:
The P&T committee must review for clinical appropriateness the practices and policies
for formulary management activities, such as prior authorizations, step therapies, quantity
limitations, generic substitutions and other drug utilization activities that affect access.
P&T committee recommendations regarding these activities are advisory only and not
binding on the Part D sponsor.
Formulary management decisions must be based on scientific evidence, and may also be
based on pharmacoeconomic considerations that achieve appropriate, safe and cost
effective drug therapy.
The P&T committees will be required to establish and document procedures to ensure
appropriate drug review and inclusion. This includes documentation of decisions
regarding formulary development and revision and utilization management activities (42
CFR 423.120(b)(1)(viii)). P&T committee recommendations regarding which Part D
drugs are placed on a sponsor‟s formulary are binding on the Part D sponsor.
Clinical decisions by the P&T committee should be based on scientific evidence and
standards of practice, including peer reviewed medical literature, well-established clinical
practice guidelines and pharmacoeconomic studies, as well as other sources of
appropriate information.
Drugs‟ therapeutic advantages in terms of safety and efficacy must be considered when
selecting formulary drugs and placing them on formulary tiers.
The P&T committee will make a reasonable effort to review a new FDA approved drug
product (or new FDA approved indication) within 90 days and will make a decision on
each new FDA approved drug product (or new FDA approved indication) within 180
days of its release onto the market, or a clinical justification will be provided if this
timeframe is not met.
The P&T committee will evaluate and analyze treatment protocols and procedures related
to the sponsor‟s formulary at least annually.
The P&T committee will approve inclusion or exclusion of the therapeutic classes in the
formulary on an annual basis.
Part D sponsors that change PBMs mid-year are required to continue the existing
formulary. Decisions regarding formulary inclusion made by the previous PBM‟s P&T
committee are binding on the assuming PBM. CMS will not approve negative formulary
change requests for the purpose of aligning an existing formulary with that of a new
PBM.
30.1.6 - Formulary Exceptions
P&T committees must review for clinical appropriateness protocols and procedures for the
timely use of and access to both formulary and non-formulary drug products. Part D coverage
determinations and appeals information can be found in chapter 18 of this manual.
30.1.7 - P&T Committee Role in Transition
(Rev. 2, Issued: 07-18-08; Effective/Implementation Date: 07-18-08)
At a minimum, a sponsor‟s transition process, the minimum requirements of which are detailed
in section 30.4, will address procedures for medical review of non formulary drug requests and,
when appropriate, a process for switching new Part D sponsor enrollees to therapeutically
appropriate formulary alternatives failing an affirmative medical necessity determination. CMS
will look to transition process submissions for assurances that a sponsor‟s P&T committee will
review and provide recommendations regarding the procedures for medical review of nonformulary drug requests. P&T committee involvement will help ensure that transition decisions
appropriately address situations involving enrollees stabilized on drugs that are not on the
sponsor‟s formulary (or that are on the formulary but require prior authorization or step therapy
under a sponsor's utilization management requirements) and which are known to have risks
associated with any changes in the prescribed regimen.
30.2 - Provision of an Adequate Formulary
(Rev. 2, Issued: 07-18-08; Effective/Implementation Date: 07-18-08)
CMS encourages Part D sponsors to submit formularies similar to those in widespread use today.
CMS will check the formulary to ensure inclusion of a range of drugs in a broad distribution of
therapeutic categories and classes, in order to satisfy the Medicare Modernization Act (MMA)
requirement that a sponsor‟s categorization system does not substantially discourage enrollment
by any group of beneficiaries. CMS will consider the specific drugs, tiering and utilization
management strategies employed in each formulary. CMS will identify outliers from common
benefit management practices for further evaluation. Sponsors may be asked to provide written
clinical justification for unusual benefit features that are identified as outliers.
30.2.1 - Formulary Categories and Classes
(Rev. 2, Issued: 07-18-08; Effective/Implementation Date: 07-18-08)
Part D formularies must include drug categories and classes that cover all disease states. CMS
will evaluate the sufficiency of a Part D sponsor‟s formulary categories and classes in
conjunction with the formulary drug list to ensure that the formulary provides access to an
acceptable range of Part D drug choices.
Part D sponsors that utilize a classification system that is consistent with the United States
Pharmacopedia (USP) classification system, available at www.usp.org, will qualify for a safe
harbor, meaning that CMS will approve their formulary classification system. For sponsors that
choose to adopt an alternative to USP‟s classification structure, CMS will check the sponsor‟s
proposed classification system to determine if it is similar to USP or other commonly used
classification systems, such as the American Hospital Formulary Service (AHFS)
Pharmacologic-Therapeutic Classification (information available at www.ashp.org/ahfs).
Each category or class must include at least two drugs (unless only one drug is available for a
particular category or class, or only two drugs are available but one drug is clinically superior to
the other for a particular category or class), regardless of the classification system that is utilized.
The two drug minimum requirement must be met through the provision of two chemically
distinct drugs. In other words, Part D sponsors will not meet this requirement by including only
two dosage forms or strengths of the same drug, or a brand name drug and its generic equivalent.
Aside from the inclusion of two drugs in each category or class, multiple strengths and dosage
forms should also be available for each covered drug. This should encompass dosage forms used
commonly in LTC facilities and home infusion.
CMS may require more than two drugs for particular categories or classes if additional drugs
present unique and important therapeutic advantages in terms of safety and efficacy, and their
absence from the sponsor‟s formulary would substantially discourage enrollment by beneficiaries
with certain disease states.
30.2.1.1 - Application of Existing or New Drugs into the Current Version of
the USP Model Guidelines
(Rev. 2, Issued: 07-18-08; Effective/Implementation Date: 07-18-08)
For those formularies that utilize the USP Model Guidelines classification structure, there are
several methods to accommodate new Part D drugs that come on to the market during the
contract year. These methods may also be utilized to accommodate existing Part D drugs that
cannot be classified under the USP Model Guidelines. CMS expects one of the four options
listed below to be used for the above mentioned situations.
1. Addition of a Part D drug into an existing USP category or class. In the event that a
new Part D drug is approved and is to be added to the formulary, the newly approved Part
D drug may fit into the current classification system. For instance, if a new protease
inhibitor is approved, this drug would be added to the formulary in the USP Antivirals
category, under the Anti-HIV Agents, Protease Inhibitors class.
2. Placement of a Part D drug into an “Other” class. In the current USP Model
Guidelines, USP listed an “Other” class under various categories. Should a new Part D
drug receive approval that can not be placed into an existing class, and the particular USP
category contains an “Other” class, the new drug may be placed into the “Other” class.
3. Addition of a new class under an existing category. If a new Part D drug is approved
that does not fit into an existing class, but is appropriate for a particular category, then a
new class may be displayed under an existing category. This method would also apply to
formularies that utilize AHFS or an other classification structure.
4. Miscellaneous Therapeutic Agents. If an existing or newly approved Part D drug does
not fit into any existing category, a “Miscellaneous Therapeutic Agents” category may be
displayed on the formulary.
30.2.2 - Formulary Benefit Management Tools
(Rev. 2, Issued: 07-18-08; Effective/Implementation Date: 07-18-08)
CMS will look to existing best practices to check that Part D sponsors‟ use of prior authorization,
step therapy, and quantity limits is consistent with such practices. CMS will look to current
industry standards as well as appropriate guidelines that might be found from expert
organizations and to the use of such standards in existing drug sponsors that are widely used by
seniors and people with disabilities. CMS will ensure that sponsors‟ use of such tools is
consistent with best practices. CMS will also compare formularies among the applicants to
analyze the comparative use of practices such as prior authorization, step therapy, and quantity
limits. Part D sponsors should be consistent with the FDA approved label when applying prior
authorization to assess beneficiaries‟ eligibility for coverage. In cases where a sponsor may fall
outside of best practices, the sponsor will be asked to provide a reasonable justification for its
practices.
CMS‟ expectation is that formulary benefit management tools will be used in Part D formularies
consistent with the way they are applied in existing formulary systems.
30.2.2.1 - Formulary Submission of “Safety-Related” Utilization Management
Edits
(Rev. 2, Issued: 07-18-08; Effective/Implementation Date: 07-18-08)
CMS continues to require Part D sponsors to submit utilization management requirements, such
as prior authorization, step therapy and quantity limits not based upon the FDA‟s maximum daily
dose limits, as part of their Health Plan Management System (HPMS) formulary submission.
See chapter 7 of this manual for more information on drug utilization management tools.
CMS does not require Part D sponsors to submit all point-of-sale (POS) safety related edits as
part of their HPMS formulary submission. Specifically, CMS does not require Part D sponsors
to submit those POS safety edits implemented to satisfy the concurrent drug utilization review
requirements set forth in 42 CFR 423.150(c)(2). These edits are typically applied at the point-ofsale or point-of-distribution and assist the pharmacist in identifying and/or preventing
inappropriate drug therapy. These utilization review edits include the following:
● Screening for potential drug therapy problems due to therapeutic duplication;
● Age/gender-related contraindications;
●
●
●
●
Over-utilization and underutilization (e.g., early refill);
Drug-drug interactions;
Incorrect drug dosage or duration of drug therapy; and
Drug-allergy contraindications
30.2.3 - Long-term Care Accessibility
(Rev. 2, Issued: 07-18-08; Effective/Implementation Date: 07-18-08)
Part D sponsors will be required to provide medically necessary prescription drug treatments for
enrollees in the general Medicare population, as well as those enrollees who reside in LTC
facilities. For example, it is CMS‟ expectation that sponsors provide coverage of dosage forms
of drugs that are widely utilized in the LTC setting, such as unit dose products and liquid,
chewable, and parenteral preparations. Further, while nebulized solutions may not be required
on all formularies, CMS would expect sponsors to also cover these dosage forms under
circumstances in which Part B coverage is not available. When determining days supplies for
residents in LTC facilities, Part D sponsors should follow industry best practices and allow for at
least 31 days per fill.
30.2.4 - Specialty Tiers
(Rev. 2, Issued: 07-18-08; Effective/Implementation Date: 07-18-08)
42 CFR 423.578(a)(7) allows Part D sponsors to exempt a formulary tier, in which it places very
high cost and unique items, from tiered cost-sharing exceptions. In order to ensure that a Part D
sponsor does not substantially discourage enrollment by specific patient populations reliant upon
these medications, CMS will only approve specialty tiers within formularies and benefit designs
that comply with the following:
Only one tier is designated a specialty tier exempt from cost-sharing exceptions.
Cost-sharing associated with the specialty tier is limited to 25% after the deductible and
before the initial coverage limit (or an actuarially equivalent for sponsors with decreased
or no deductible under alternative prescription drug coverage designs).
Only Part D drugs with sponsor negotiated prices that exceed the dollar-per-month
amount established by CMS in the annual Call Letter may be placed in the specialty tier.
CMS will apply an upfront evaluation across all plans for drugs that exceed the dollarper-month threshold and are intended for inclusion in the specialty tier.
If not all drugs (including all strengths) within a category or class meet the criteria for
inclusion in the specialty tier, the sponsor must ensure that placement of the remaining
drugs among the other tiers of the formulary does not substantially discourage
enrollment.
Part D sponsors will need to evaluate the negotiated prices at the drug product strength, package
size, and formulation level in order to determine appropriate inclusion of the drug in the Part D
plan‟s specialty tier. If a Part D drug product is available in multiple strengths, package sizes
and formulations, CMS will only allow inclusion on the specialty tier of those strengths, package
sizes and formulations that would reasonably exceed the dollar-per-month threshold. As a result,
Part D sponsors should be prepared to locate smaller package sizes, strengths, and formulations
of the very same drug on a tier other than the specialty tier if the smaller size cannot satisfy the
monthly dollar threshold.
Part D sponsors must evaluate the long acting nature of some drug formulations and calculate the
monthly cost across the drug's full duration of action. For example, if the specialty tier threshold
was $600 dollars, a long acting formulation with a plan negotiated price of $900 dollars that lasts
for 3 months would not be eligible for the plan's specialty tier since the monthly cost is only
$300 dollars.
30.2.5 - Protected Classes
(Rev. 10, Issued: 02-19-10, Effective/Implementation Date: 03-01-10)
Part D sponsor formularies must include all or substantially all drugs in the immunosuppressant
(for prophylaxis of organ transplant rejection), antidepressant, antipsychotic, anticonvulsant,
antiretroviral, and antineoplastic classes. CMS instituted this policy because it was necessary to
ensure that Medicare beneficiaries reliant upon these drugs would not be substantially
discouraged from enrolling in certain Part D plans, as well as to mitigate the risks and
complications associated with an interruption of therapy for these vulnerable populations.
Formularies must include substantially all drugs in these six categories that are FDA approved by
the last CMS specified HPMS formulary upload date for the upcoming contract year. New drugs
or newly approved uses for drugs within the six classes that come onto the market after the CMS
specified formulary upload date will be subject to an expedited P&T committee review. The
expedited review process requires P&T committees to make a decision within 90 days, rather
than the normal 180-day requirement. At the end of the 90 day period, these drugs must be
added to Part D plan formularies.
“Substantially all” in this context means that all drugs and unique dosage forms in these
categories are expected to be included in sponsor formularies, with the following exceptions:
multi-source brands of the identical molecular structure;
extended release products when the immediate-release product is included;
products that have the same active ingredient or moiety; and
dosage forms that do not provide a unique route of administration (e.g., tablets and
capsules versus tablets and transdermals);
Part D sponsors may not implement prior authorization or step therapy requirements that are
intended to steer beneficiaries to preferred alternatives within these classes for enrollees who are
currently taking a drug. This prohibition applies to those beneficiaries already enrolled in the
plan as well as new enrollees who were actively taking drugs in any of the six classes of clinical
concern prior to enrollment into the plan. If a sponsor cannot determine at the point of sale that
an enrollee is not currently taking a drug (e.g., new enrollee filling a prescription for the first
time), sponsors shall treat such enrollees as currently taking the drug.
For HIV/AIDS drugs, utilization management tools such as prior authorization and step therapy
are generally not employed in widely used, best practice formulary models. Part D sponsors may
conduct consultations with physicians regarding treatment options and outcomes in all cases.
Part D sponsors may apply prior authorization to establish appropriate payment under Part B or
Part D, even if the beneficiary is currently taking the drug. In Part B versus Part D situations,
CMS expects Part D sponsors will work aggressively to eliminate any interruptions of current
therapy.
30.2.6 - Submission of Multiple Formularies
(Rev. 2, Issued: 07-18-08; Effective/Implementation Date: 07-18-08)
CMS recognizes that sponsors may wish to submit more than one formulary in order to offer
enhanced access to Part D drugs. CMS has the responsibility to ensure that there are meaningful
differences between multiple formulary submissions from one organization to reduce confusion
amongst beneficiaries. CMS may request that sponsors withdraw a formulary in which no
meaningful differences can be demonstrated.
30.2.7 - Formulary Performance and Content Review
(Rev. 10, Issued: 02-19-10, Effective/Implementation Date: 03-01-10)
Regardless of the classification system chosen, CMS will review and approve drug lists that are
consistent with best practice formularies currently in widespread use today. The current
formulary requirements are subject to change and/or revision.
CMS requires formulary drug lists to pass the following checks:
CMS will review formularies to ensure representation of USP formulary key drug types
on all Part D formularies. Part D sponsors whose formularies are identified as outliers
will be contacted and their formularies will require re-evaluation.
CMS will review tier placement to ensure that the formulary does not substantially
discourage enrollment of certain beneficiaries. When developing their formulary tier
structure, sponsors should utilize standard industry practices. Tier 1 should be considered
the lowest cost-sharing tier available to beneficiaries. Any and all subsequent tiers within
the formulary structure will be higher cost-sharing tiers in ascending order. For example,
drugs in Tier 3 will have a higher cost-share for beneficiaries than drugs in Tier 2. Best
practices in existing formularies and preferred drug lists generally place drugs in a less
preferable position only when drugs that are therapeutically similar (i.e., drugs that
provide similar treatment outcomes) are in more preferable positions on the formulary.
The CMS review will focus on identifying drug categories that may substantially
discourage enrollment of certain beneficiaries by placing drugs in non-preferred tiers in
the absence of commonly used therapeutically similar drugs in more preferred positions.
CMS will analyze formularies to determine whether appropriate access is afforded to
drugs or drug classes addressed in widely accepted treatment guidelines which are
indicative of general best practice. Examples of these may include asthma, diabetes,
chronic stable angina, atrial fibrillation, heart failure, thrombosis, lipid disorders,
hypertension, chronic obstructive pulmonary disease, dementia, depression, bipolar
disorder, schizophrenia, benign prostatic hyperplasia, osteoporosis, migraine,
gastroesophageal reflux disease, epilepsy, Parkinson‟s disease, end stage renal disease,
hepatitis, tuberculosis, community acquired pneumonia, rheumatoid arthritis, multiple
sclerosis and HIV. Part D sponsors should be aware of treatment guidelines impacting
those enrollees residing in LTC facilities, such as CDC‟s annual Morbidity and Mortality
Weekly Report (MMWR) on prevention and control of influenza. This list of conditions
does not represent an exhaustive list, but merely serves as another check in the review
process.
CMS will analyze the availability and tier position of the most commonly prescribed drug
classes for the Medicare population (Appendix D). This list is derived from Part D
claims data. The drugs identified will be expanded to the class level and used in the
formulary review process. CMS understands that sponsors will not provide identical
coverage of these drug classes, and CMS‟ review will focus on ensuring that sponsors
present a balanced formulary. These drug classes will cover common diseases and
conditions, and will allow CMS to ensure that sponsors are covering the most widely
used medications, or therapeutically similar medications, for the most common
conditions.
CMS will review all Part D sponsors‟ formularies to ensure they contain all commercially
available vaccines (unless excluded due to available reimbursement under Part B, e.g.,
influenza or pneumococcal vaccines). Sponsors will only be allowed to use drug
utilization management tools to:
o Assess the necessity of vaccines that are less commonly administered in the
Medicare population, such as anthrax and yellow fever vaccines;
o Facilitate use of vaccines in line with Advisory Committee on Immunization
Practices (ACIP) recommendations; and
o Evaluate potential reimbursement of those vaccines that could be covered under
Part B when directly related to the treatment of an injury or direct exposure to a
disease or condition (e.g., tetanus).
All formularies will be evaluated using the criteria above in this section. Outliers for each area
of review will be further evaluated by CMS to determine whether the outlier is deemed
potentially discriminatory. Examples of this may include a lack of appropriate drug classes to
treat certain diseases, a lack of sufficient drugs in a therapeutic class, inappropriate tier
placement that would discriminate against a group of beneficiaries, or missing drugs that would
cause discrimination. If any of the outliers appear to create problems of access, sponsors will
have the opportunity to present reasonable clinical justifications.
30.2.8 - Formulary Submission Timeline
(Rev. 2, Issued: 07-18-08; Effective/Implementation Date: 07-18-08)
Part D sponsors that fail to meet formulary submission and re-submission deadlines during the
formulary approval process may face a CMS determination that CMS cannot approve their Part
D bids. For most Part D sponsors, a failure to obtain bid approvals will result in the termination
of their Part D sponsor or MA organization contracts effective at the end of the existing contract
year. In the case of an initial Part D sponsor or MA organization contract applicant, CMS would
decline to enter into a contract with the organization.
All Part D sponsors that fail to meet CMS established formulary timelines will be precluded
from entering into a contract with CMS. Such a determination would be made on the basis that
the organization had failed to submit a bid which CMS could approve, a determination that
would not be subject to a request for appeal under Subpart N of 42 CFR 423 (for Part D
sponsors) and 42 CFR 422 (for MA organizations).
30.3 - Formulary Changes
(Rev. 2, Issued: 07-18-08; Effective/Implementation Date: 07-18-08)
The removal of any drug, whether a Part D drug or a supplemental drug offered as a
supplemental benefit under an enhanced alternative benefit design, is subject to the formulary
change guidance contained in the following sections.
30.3.1 - Limitation on Changes in Therapeutic Classification
(Rev. 2, Issued: 07-18-08; Effective/Implementation Date: 07-18-08)
Except as CMS may permit to account for new therapeutic uses and newly approved Part D
drugs, a Part D sponsor may not change formulary categories and classes after the last CMS
specified HPMS formulary upload date for the upcoming contract year.
30.3.2 - Limitation of Formulary Changes Prior to Beginning of Contract
Year
(Rev. 2, Issued: 07-18-08; Effective/Implementation Date: 07-18-08)
Except when the Food and Drug Administration deems a Part D drug unsafe or a manufacturer
removes a Part D drug from the market, a Part D sponsor may not remove a covered Part D drug
from its formulary, or make any change in preferred or tiered cost-sharing status of a covered
Part D drug, between the beginning of the annual coordinated election period described in
section 42 CFR 423.38(b) and 60 days after the beginning of the contract year associated with
the annual coordinated election period.
30.3.3 - Midyear Formulary Changes
(Rev. 2, Issued: 07-18-08; Effective/Implementation Date: 07-18-08)
Both industry best practices and the best interests of Medicare beneficiaries call for limited
formulary changes during the contract year. CMS believes that formulary stability is extremely
important so that enrollees maintain access to the benefit they chose during enrollment as
represented to them by the sponsor. However, prescription drug therapies are constantly
evolving, and new drug availability, medical knowledge, and opportunities for improving safety
and quality in prescription drug use at a low cost will inevitably occur over the course of the
year. As recognized in the statute and regulations, these new developments may require
formulary changes during the year in order to provide high-quality, low-cost prescription drug
coverage.
30.3.3.1 - Policy Regarding Formulary Changes
(Rev. 2, Issued: 07-18-08; Effective/Implementation Date: 07-18-08)
The following is CMS‟ policy regarding formulary changes:
Part D sponsors may expand formularies by adding drugs to their formularies, reducing
copayments or coinsurance by placing a drug on a lower cost-sharing tier, or deleting
utilization management requirements at any time during the year.
Formulary Maintenance Changes: After March 1, Part D sponsors may make
maintenance changes to their formulary, such as replacing brand name with new generic
drugs or modifying formularies as a result of new information on drug safety or
effectiveness.
Non-maintenance (Other) Formulary Changes: Part D sponsors may only remove Part D
drugs from their formulary, move covered Part D drugs to a less preferred tier status, or
add utilization management requirements. For these additional types of formulary
changes approved by CMS, Part D sponsors should make such formulary changes only if
enrollees currently taking the affected drug are exempt from the formulary change for the
remainder of the contract year.
CMS must approve any changes to a Part D sponsor‟s formulary; however, Part D sponsors are
not required to obtain CMS approval for drugs that have been withdrawn from the market by
either the FDA or a product manufacturer.
30.3.3.2 - Formulary Maintenance Changes
(Rev. 10, Issued: 02-19-10, Effective/Implementation Date: 03-01-10)
In order to promote best practices and protect the interests of Medicare beneficiaries, CMS will
generally give positive consideration to the following types of formulary changes:
Removal or placement in a less preferred tier of a brand name drug upon the availability
and addition of an A-rated generic or multi-source brand name equivalent, at a lower tier
or cost to the beneficiary.
Removal of a non-Part D drug inadvertently included on the formulary.
Addition of utilization management tools based upon a new FDA “black box” warning.
Removal of a drug based upon a new FDA market withdrawal notice.
Removal of a drug based on long term shortage and market availability (described in
chapter 5, section 50.13).
Removal or placement in a less preferred tier based upon new clinical guidelines or
information recognized by CMS (e.g., CDC‟s recommendation against using older
antivirals for treatment and prophylaxis of the flu).
The addition of utilization management when necessary to effectuate other approved
formulary changes (e.g., prior authorization on a brand name drug when generic is now
available on formulary at a lower cost), to help determine B vs. D coverage (subject to
CMS guidance on least burdensome ways to make this determination), or to promote safe
utilization of a Part D drug based upon new clinical guidelines or information.
Part D sponsors will need to provide a justification when submitting formulary maintenance
change requests, but they may assume that change requests based upon these justifications are
approved if they do not hear from CMS within 30 days of submission.
30.3.3.3 - Non-maintenance (Other) Formulary Changes
(Rev. 2, Issued: 07-18-08; Effective/Implementation Date: 07-18-08)
Experience with formulary management indicates that the vast majority of formulary changes are
“maintenance” changes that would generally be approved by CMS. CMS will review additional
types of non-maintenance formulary change requests and their corresponding justification. Part
D sponsors should make such formulary changes only if enrollees currently taking the affected
drug are exempt from the formulary change for the remainder of the contract year. These
additional types of change requests include, but are not limited to:
Changing preferred or non-preferred formulary drugs, adding utilization management, or
increasing cost sharing on preferred drugs (unrelated to the reasons stated above);
Removing dosage forms; or
Exchanging therapeutic alternatives (either by formulary addition/removal or tier
exchanges).
If CMS disapproves a formulary change request, the justification for disapproval will generally
be based on one of the following:
The reasonableness and/or necessity for the proposed change in the context of preventing
any appearance of “bait and switch” in the formulary. Medicare beneficiaries select Part
D sponsors, in part, based on the formulary that is marketed during annual open
enrollment and, therefore, have a legitimate expectation that they will have continuing
access to coverage of the Part D drugs they are using throughout the contract year. This
beneficiary expectation will be balanced against the sponsor‟s desire to practice good
formulary management in order to provide a low-cost, high-quality prescription drug
benefit that continues to effectively meet the needs of beneficiaries. Part D sponsors may
avoid any appearance of a “bait and switch” concern by exempting enrollees who are
currently using the affected drugs from the formulary change for the remainder of the
contract year.
The proposed change on its face in the context of substantially discouraging enrollment
by certain beneficiary groups.
The impact of the proposed change on the formulary as a whole to ensure the formulary
continues to satisfy the minimum formulary requirements established by CMS.
Because these additional types of change requests will require more extensive review by CMS,
Part D sponsors must not implement such changes until they receive explicit notification of
approval from CMS and must not issue any beneficiary notices of such forthcoming changes
prior to receiving explicit and affirmative CMS approval.
30.3.4 - Provision of Notice Regarding Formulary Changes
(Rev. 2, Issued: 07-18-08; Effective/Implementation Date: 07-18-08)
Part D sponsors must provide notice of formulary changes as outlined in the following sections.
Additionally, for formulary maintenance changes (described in section 30.3.2), CMS will not
require Part D sponsors to wait for approval before sending notice of a proposed formulary
change to required parties. For these changes, a Part D sponsor may choose to provide notice to
CMS and other required parties at the same time. Part D sponsors will provide notice to CMS
via the HPMS system, which will also require plans to specify the intended effective date.
Although sponsors may provide notice to all required parties prior to receiving CMS approval,
sponsors might prefer to wait so that they do not risk sending notice of a change that is
subsequently disapproved by CMS. For formulary non-maintenance or “other” changes
(described in section 30.3.3.3), Part D sponsors must not issue any beneficiary notices until CMS
has explicitly approved the non-maintenance change.
30.3.4.1 - Beneficiary Notice Requirements
(Rev. 2, Issued: 07-18-08; Effective/Implementation Date: 07-18-08)
Prior to removing a covered Part D drug from its formulary, or making any change in the
preferred or tiered cost-sharing status of a covered Part D drug, a Part D sponsor must either:
Provide direct written notice to affected enrollees at least 60 days prior to the date the
change becomes effective; or
At the time an affected enrollee requests a refill of the Part D drug, provide such enrollee
with a 60 day supply of the Part D drug under the same terms as previously allowed and
written notice of the formulary change.
If a beneficiary is not “affected” by a formulary change (in other words, exempted from a
formulary change), notice is not required.
The written notice must contain the following information:
The name of the affected covered Part D drug;
Whether the Part D sponsor is removing the covered Part D drug or changing its
preferred or tiered cost-sharing status;
The reason why the Part D sponsor is removing such covered Part D drug from the
formulary, or changing its preferred or tiered cost-sharing status;
Alternative drugs in the same therapeutic category or class or cost-sharing tier and
expected cost-sharing for those drugs; and
The means by which enrollees may obtain a coverage determination under 42 CFR
423.566 or exception under 42 CFR 423.578.
As an alternative to providing written notice, Part D sponsors may provide such notice
electronically if, and only if, an enrollee affirmatively elects to receive such notice electronically.
30.3.4.2 - Notice for Other Entities
(Rev. 2, Issued: 07-18-08; Effective/Implementation Date: 07-18-08)
Prior to removing a covered Part D drug from its formulary, or making any change in the
preferred or tiered cost-sharing status of a covered Part D drug, a Part D sponsor must provide at
least 60 days notice to CMS, State Pharmaceutical Assistance Programs (as defined in 42 CFR
423.454), entities providing other prescription drug coverage (as described in 42 CFR
423.464(f)(1), authorized prescribers, network pharmacies, and pharmacists prior to the date
such change becomes effective.
To the extent possible, sponsors may elect to provide State Pharmaceutical Assistance Programs,
entities providing other prescription drug coverage (as described in 42 CFR 423.464(f)(1),
authorized prescribers, network pharmacies, and pharmacists an annual notice providing
information on the sponsor‟s formulary change policy (i.e., length of notice, methods of
communication with beneficiaries, and any electronic notices providers may receive at the pointof-sale regarding formulary status) and the sponsor‟s Web site where these entities can verify the
formulary status of particular drugs.
30.3.4.3 - Provision of Notice Regarding Safety-Related Formulary Changes
(Rev. 2, Issued: 07-18-08; Effective/Implementation Date: 07-18-08)
Part D sponsors may immediately remove from their formularies covered Part D drugs deemed
unsafe by the Food and Drug Administration or removed from the market by their manufacturer
without meeting the advance notice requirements specified in this section. However, Part D
sponsors must provide retrospective notice of any such formulary changes to affected enrollees,
CMS, State Pharmaceutical Assistance Programs (as defined in 42 CFR 423.454), entities
providing other prescription drug coverage (as described in 42 CFR 423.464(f)(1), authorized
prescribers, network pharmacies, and pharmacists consistent with the requirements set forth in
this section. CMS expects that this retrospective notice will occur as soon as possible to inform
enrolled beneficiaries of potential safety concerns surrounding medications they are taking,
especially those beneficiaries who may have a 90 day supply and will not interact with the
pharmacy for an extended period.
In instances where there has been an announcement of a market withdrawal, but the withdrawal
has not yet taken place, Part D sponsors may opt to either remove the drug immediately with a
retrospective notice to “affected enrollees” or provide an advance notice. CMS expects Part D
sponsors to consider all pertinent information available from the FDA related to the withdrawal.
30.3.4.4 - Notice Requirements for Pending Formulary Changes
(Rev. 2, Issued: 07-18-08; Effective/Implementation Date: 07-18-08)
When a Part D sponsor notifies CMS of a formulary change in HPMS, the change is assigned a
prospective effective date. During the period of time between when a Part D sponsor has
notified CMS of a prospective change and the actual effective date of that change, Part D
sponsors must ensure appropriate beneficiary protections are implemented should a beneficiary
who has not been notified of the change present with a new prescription for the drug whose
formulary status is changing.
For maintenance changes outlined in section 30.3.3.2, the Part D sponsor must implement the
beneficiary notice requirements contained in section 30.3.4.1 (i.e., 60 days of advance written
notice before implementing the change for the individual). For example, assume on March 1st, a
Part D sponsor notifies CMS via HPMS that it is removing a brand name drug from its formulary
due to the availability of a new generic. The sponsor indicates the effective date for this
formulary change will be May 1st. If a beneficiary were to present on April 1st with a new
prescription for the brand name drug pending removal, the Part D sponsor would provide written
notice of the change and not implement the change until June 1st, in order to provide the full 60
days of advance notice to that beneficiary.
A Part D sponsor may elect to provide written notice to all of its enrollees of a pending
formulary maintenance change in lieu of notifying only the “affected enrollees.” Such an
approach would satisfy the beneficiary notice requirements in section 30.3.4.1 because all
enrollees, including “affected enrollees” would receive advance notice of a formulary change. In
addition, it would preclude the plan from needing to extend the formulary change effective date
for those enrollees who present with a new prescription for the drug between the date when a
Part D sponsor notifies CMS of a prospective change and the actual effective date of that change.
However, Part D sponsors are still required to provide advance written notice of a formulary
change and a 60 day-supply of the drug whose formulary status is changing to those beneficiaries
who enroll in the plan after the initial advance formulary change notice, as described above.
For non-maintenance changes outlined in section 30.3.3.3, the Part D sponsors must not
implement the formulary change for a beneficiary who presents with a new prescription for a
pending formulary drug. In accordance with our non-maintenance formulary change policy,
enrollees currently taking the affected drug must be exempt from the formulary change for the
remainder of the contract year. For example, assume on March 1st, a Part D sponsor notifies
CMS via HPMS it is removing a drug from its formulary with no replacement. CMS approves
the change. The sponsor indicates the effective date for this formulary change will be May 1st.
If a beneficiary were to present on April 1st with a new prescription for the drug pending
removal, the Part D sponsor would not implement this change for the beneficiary for the
remainder of the contract year.
30.3.5 - Formulary Change Notice in Advance of Upcoming Contract Year
(Rev. 2, Issued: 07-18-08; Effective/Implementation Date: 07-18-08)
Enrollees must receive an annual notice of change (ANOC) by October 31st prior to the
upcoming contract year. The ANOC is intended to outline benefit changes for the upcoming
year including changes in cost-sharing and drug tier structures. Because the upcoming year‟s
formulary is viewed as a new formulary, Part D sponsors are not required to identify specific
drug changes impacting enrollees in their explanation of benefits, or provide a 60-day notice of
changes for the upcoming year‟s formulary. However, enrollees must receive a comprehensive
or abridged formulary with the ANOC, which will provide enrollees with at least 60 days to
review the new formulary to determine if their medications are covered and whether the costsharing for their covered medications will change in the upcoming contract year.
30.4 - Transition
(Rev. 2, Issued: 07-18-08; Effective/Implementation Date: 07-18-08)
A Part D sponsor must provide for an appropriate transition process for new enrollees prescribed
Part D drugs that are not on its formulary. The transition policy must satisfy the requirements in
the following sections.
30.4.1 - Transition Requirements
(Rev. 2, Issued: 07-18-08; Effective/Implementation Date: 07-18-08)
A Part D sponsor‟s transition process is necessary with respect to: (1) the transition of new
enrollees into prescription drug plans following the annual coordinated election period; (2) the
transition of newly eligible Medicare beneficiaries from other coverage; (3) the transition of
individuals who switch from one plan to another after the start of the contract year; (4) enrollees
residing in LTC facilities; and (5) in some cases, current enrollees affected by formulary changes
from one contract year to the next. In addition, sponsors should consider how to expedite
transitions to formulary drugs for enrollees who change treatment settings due to changes in level
of care.
Transition process requirements will be applicable to non-formulary drugs, meaning both: (1)
Part D drugs that are not on a sponsor‟s formulary, and (2) Part D drugs that are on a sponsor‟s
formulary but require prior authorization or step therapy under a plan's utilization management
rules, since a formulary drug whose access is restricted via utilization management requirements
is essentially equivalent to a non-formulary Part D drug to the extent that the relevant utilization
management requirements are not met for a particular enrollee.
A Part D sponsor‟s transition process must address situations in which an individual first
presents at a participating pharmacy with a prescription for a drug that is not on the formulary,
unaware of what is covered by the plan or of the sponsor‟s exceptions process for providing
access to Part D drugs that are not covered. This may be particularly true for full-benefit dual
eligible beneficiaries who are auto-enrolled in a plan and do not make an affirmative choice
based on review of a plan‟s benefit relative to their existing medication needs. Part D sponsors
must have systems capabilities that allow them to provide a one time, temporary supply of nonformulary Part D drugs (including Part D drugs that are on a sponsor‟s formulary but require
prior authorization or step therapy under a sponsor‟s utilization management rules) in order to
accommodate the immediate needs of an enrollee, as well as to allow the sponsor and/or the
enrollee sufficient time to work out with the prescriber an appropriate switch to a therapeutically
equivalent medication or the completion of an exception request to maintain coverage of an
existing drug based on medical necessity reasons.
30.4.2 - General Transition Process
(Rev. 2, Issued: 07-18-08; Effective/Implementation Date: 07-18-08)
Part D sponsors must ensure that they have provided their enrollees who have used a transition
benefit with the appropriate assistance and information necessary to enable them to better
understand the purpose of the transition. Steps that sponsors should consider to ensure a
meaningful transition include:
Analyzing claims data to determine which enrollees require information about their
transition supply.
Contacting those enrollees to ensure they have the necessary information to enable them
to switch to a formulary product or as an alternative to pursue necessary prior
authorizations or formulary exceptions.
Increasing call center capacity, including pharmacy help lines, to respond to an
anticipated increase in call volume from affected enrollees regarding the sponsor‟s
transition process.
Making arrangements to continue to provide necessary drugs to an enrollee by extending
the transition period, on a case-by-case basis, if the enrollee‟s exception request or appeal
has not been processed by the end of the minimum transition period.
30.4.3 - New Prescriptions Versus Ongoing Drug Therapy
(Rev. 2, Issued: 07-18-08; Effective/Implementation Date: 07-18-08)
CMS is aware that it may be difficult for Part D sponsors to distinguish between new
prescriptions for non-formulary Part D drugs and refills for ongoing drug therapy involving nonformulary Part D drugs. For example, some new enrollees may need to switch pharmacies when
they enroll in a new Part D plan (or when they enroll in Part D for the first time) and, depending
on State law, their prescriptions may not transfer from pharmacy to pharmacy. In other words,
some enrollees may need to present at their new network pharmacy with a new prescription for
use at that pharmacy, even if that prescription is for ongoing drug therapy. CMS recognizes that
it may be difficult for sponsors to distinguish between ongoing drug therapy and a brand-new
prescription for a non-formulary Part D drug. Although Part D sponsors may attempt to follow
up with prescribing physicians and pharmacies to ascertain the status of a prescription presented
during the transition period, CMS clarifies that if a sponsor is unable to make this distinction at
the point of sale, it will be required to apply all transition process standards to a new prescription
for a non-formulary Part D drug. In other words, a brand-new prescription for a non-formulary
drug will not be treated any differently than an ongoing prescription for a non-formulary drug
when a distinction cannot be made at the point of sale.
30.4.4 - Transition Timeframes and Temporary Fills
(Rev. 2, Issued: 07-18-08; Effective/Implementation Date: 07-18-08)
Within the first 90 days of coverage under a new plan, plans must provide a temporary fill when
the beneficiary requests a refill of a non-formulary drug (including Part D drugs that are on a
plan‟s formulary but require prior authorization or step therapy under a plan‟s utilization
management rules). This 90 day timeframe applies to retail, home infusion, long-term care and
mail-order pharmacies. CMS believes it makes sense to both limit and define the amount of time
during which a transition process is applicable to new enrollees. Thus, plans will be required to
provide a temporary supply fill anytime during the first 90 days of a beneficiary‟s enrollment in a
plan. Since certain enrollees may join a plan at any time during the year, this requirement will
apply beginning on an enrollee‟s first effective date of coverage, and not only to the first 90 days
of the contract year. This 90 day timeframe assists those beneficiaries transitioning from other
prescription drug coverage who obtained extended (e.g., 90-day) supplies of maintenance drugs
prior to the last effective date of their previous coverage.
30.4.4.1 - Timeframe and Transition Fills in the Outpatient Setting
(Rev. 2, Issued: 07-18-08; Effective/Implementation Date: 07-18-08)
In the outpatient setting, the one-time, temporary supply of non-formulary Part D drugs –
including Part D drugs that are on a sponsor‟s formulary but require prior authorization or step
therapy under a sponsor‟s utilization management rules – must be for at least 30 days of
medication, unless the prescription is written by a prescriber for less than 30 days. Part D
sponsors should note that, outside the long-term care setting, such a temporary fill may be a onetime fill only.
30.4.4.2 - Timeframe and Transition Fills in the Long Term Care Setting
(Rev. 10, Issued: 02-19-10, Effective/Implementation Date: 03-01-10)
The temporary supply of non-formulary Part D drugs – including Part D drugs that are on a Part
D sponsor's formulary but require prior authorization or step therapy under a sponsor's utilization
management rules – for a new enrollee in an LTC facility may be for up to 31 days (unless the
prescription is written for less than 31 days). CMS is requiring up to a 31-day transition supply
given that many LTC pharmacies and facilities dispense medications in 31-day increments.
However, unlike in the outpatient setting, sponsors must honor multiple fills of non-formulary
Part D drugs, including Part D drugs that are on a sponsor‟s formulary but require prior
authorization or step therapy under a sponsor‟s utilization management rules, as necessary during
the entire length of the 90-day transition period.
Beginning with contract year 2010, CMS is permitting Part D sponsors the option of sending
required transition fill notices to network long term care pharmacies. In addition to sending
enrollees residing in LTC facilities a model transition notice via U.S. mail within 3 business days
of the transition fill, Part D sponsors may elect to send the beneficiary transition notice to the
LTC pharmacy serving the beneficiary’s LTC facility. The LTC pharmacy must then ensure
delivery of the notice to the beneficiary within 3 business days of the fill.
Part D sponsors electing this option must update their existing transition policy to specifically
address that:
1. The sponsor maintains documentation of the LTC pharmacies’ willingness to be
delegated transition notice responsibilities; and
2. The sponsor maintains a fully functional electronic communication process with the
LTC pharmacy once a transition fill has occurred (within 3 business days).
3. The LTC pharmacy will maintain a process that demonstrates notice has been
provided to the beneficiary (or his/her representative) within the 3-day period.
This option must be in place prior to the start of the 2010 contract year; otherwise, the Part D
sponsor must continue to provide notice directly to the beneficiary (or his/her designated
representative) via U.S. mail.
30.4.4.3 - Transition Extension
(Rev. 2, Issued: 07-18-08; Effective/Implementation Date: 07-18-08)
A Part D sponsor may need to make arrangements to continue to provide necessary drugs to an
enrollee via an extension of the transition period, on a case-by-case basis, to the extent that his or
her exception request or appeal has not been processed by the end of the minimum transition
period. It is vital that sponsors give affected enrollees clear guidance regarding how to proceed
after a temporary fill is provided, so that an appropriate and meaningful transition can be
effectuated by the end of the transition period. Until that transition is actually made, however,
either through a switch to an appropriate formulary drug, or a decision is made regarding an
exception request, continuation of drug coverage is necessary, other than for drugs not covered
under Part D.
30.4.5 - Transition Across Contract Years
(Rev. 10, Issued: 02-19-10, Effective/Implementation Date: 03-01-10)
After enrollees receive their ANOC on October 31st of a given year, CMS expects sponsors to
select one of the following two options for effectuating an appropriate and meaningful transition
for enrollees whose drugs are no longer on the formulary. These transition requirements apply
both to drugs that are removed from a sponsor’s formulary from one contract year to the next, as
well as to formulary drugs that remain on formulary but to which a new prior utilization or step
therapy restriction is added from one contract year to the next:
Provide a transition process for current enrollees consistent with the transition process
required for new enrollees. In order to prevent coverage gaps, sponsors choosing this
option are expected to provide a temporary supply of the requested prescription drug
(where not medically contraindicated) and provide enrollees with notice that they must
either switch to a drug on the sponsor‟s formulary or get an exception to continue taking
the requested drug; or
Effectuate a transition for current enrollees prior to the start of the new contract year. In
effectuating this transition, sponsors must aggressively work to (1) prospectively
transition current enrollees to a therapeutically equivalent formulary alternative; and (2)
complete requests for formulary and tiering exceptions to the new formulary prior to the
start of the contract year. If a sponsor approves such an exception request pursuant to
chapter 18 of this manual, the sponsor shall authorize payment prior to January 1 of the
new contract year. If, however, sponsors have not successfully transitioned affected
enrollees to a therapeutically equivalent formulary alternative or processed an exception
request by January 1 they will be expected to provide a transition supply beginning
January 1 and until such time as they have effectuated a meaningful transition.
Part D sponsors that can identify objective information demonstrating that a meaningful
transition has occurred (such as the processing of an exception request and/or evidence of a new
prescription claim for a formulary alternative processed in the month of December) do not have
to provide access to a transition supply in the new contract year for that beneficiary. However,
lacking such objective evidence, the sponsor is expected to provide a transition supply in the new
contract year and provide the corresponding transition notice.
Part D sponsors must extend their transition policies across contract years should a beneficiary
enroll into a plan with an effective enrollment date of either November 1 or December 1 and
need access to a transition supply. For example, if a beneficiary enrolls effective December 1, in
a plan whose transition policy affords a 90-day transition period for LTC enrollees and that
beneficiary requires a transition supply in mid-December, the sponsor must offer a full 90-day
transition period beginning December 1 (including a one-time, 30-day transition supply) and
extending into the following contract year. In addition, sponsors must send beneficiaries with a
November 1 or December 1 effective enrollment date an ANOC as soon as practicable after the
effective enrollment date. This ANOC will serve as advance notice of any formulary or benefit
changes in the following contract year.
30.4.6 - Emergency Supply for Current Enrollees
(Rev. 2, Issued: 07-18-08; Effective/Implementation Date: 07-18-08)
Since, as a matter of general practice, LTC facility residents must receive their medications as
ordered without delay, Part D sponsors must cover an emergency supply of non-formulary Part
D drugs for LTC facility residents as part of their transition process. During the first 90 days
after a beneficiary's enrollment, he or she will receive a transition supply. However, to the extent
that an enrollee in an LTC setting is outside his or her 90-day transition period, the sponsor must
still provide an emergency supply of non-formulary Part D drugs – including Part D drugs that
are on a sponsor's formulary that would otherwise require prior authorization or step therapy
under a sponsor's utilization management rules – while an exception or prior authorization is
requested. These emergency supplies of non-formulary Part D drugs – including Part D drugs
that are on a sponsor‟s formulary but require prior authorization or step therapy under a
sponsor‟s utilization management rules – must be for at least 31 days of medication, unless the
prescription is written by a prescriber for less than 31 days.
30.4.7 - Level of Care Changes
(Rev. 10, Issued: 02-19-10, Effective/Implementation Date: 03-01-10)
In addition to circumstances impacting new enrollees who may enter a plan with a medication
list that contains non-formulary Part D drugs, other circumstances exist in which unplanned
transitions for current enrollees could arise and in which prescribed drug regimens may not be on
sponsor formularies. These circumstances usually involve level of care changes in which a
beneficiary is changing from one treatment setting to another. For example, beneficiaries who
enter LTC facilities from hospitals are sometimes accompanied by a discharge list of
medications from the hospital formulary with very short term planning taken into account (often
under 8 hours). Similar situations may exist, for example, for beneficiaries who are discharged
from a hospital to a home; for beneficiaries who end their skilled nursing facility Medicare Part
A stay (where payments include all pharmacy charges) and who need to revert to their Part D
plan formulary; for beneficiaries who give up hospice status to revert to standard Medicare Part
A and B benefits; for beneficiaries who end an LTC facility stay and return to the community;
and for beneficiaries who are discharged from psychiatric hospitals with drug regimens that are
highly individualized.
For these unplanned transitions, beneficiaries and providers must clearly avail themselves of
sponsor exceptions and appeals processes. CMS has streamlined the grievance, coverage
determination, and appeals process requirements in order to ensure that beneficiaries receive
quick determinations regarding the medications they need. In all cases, CMS makes it clear that
a Part D sponsor is required to make coverage determinations and redeterminations as
expeditiously as the enrollee‟s health condition requires.
Effective transition of care at time of discharge to home is a major concern in LTC. Ensuring
appropriate medication reconciliation in the community is a safety issue, and requires predischarge planning. This optimally involves prescriptions being written and transmitted to the
patients’ families in the week before discharge, to assure that the medications are obtained in
advance of community discharge, to prevent a gap in care. The billing date may appear to
overlap the skilled nursing home stay, but the medications, which may be dispensed by either the
LTC or a retail pharmacy, are to be used in the home setting. While Part A does provide
reimbursement for “a limited supply” to facilitate beneficiary discharge, beneficiaries must be
permitted to have a full outpatient supply available to continue therapy once this limited supply
is exhausted. This is particularly true for beneficiaries using mail-order pharmacy, home
infusion therapy, or residing in rural areas where obtaining a continuing supply of drugs may
involve certain delays. The current standard of care promotes caregivers receiving outpatient
Part D prescriptions in advance of discharge from a Part A stay.
When an enrollee is admitted to or discharged from an LTC facility, he or she will not have
access to the remainder of the previously dispensed prescription (through no fault of his or her
own) and, therefore, sponsors must allow the enrollee to access a refill upon admission or
discharge. An early refill edit is a utilization management tool used to promote compliance and
to prevent waste. An early refill edit cannot be used to limit appropriate and necessary access to
an enrollee's Part D benefit. For example, if a patient gets a prescription for 30 tablets for a 30
day supply (i.e., 1 tablet daily), but the prescriber changes the dose to 2 tablets daily after only 10
days, it would be inappropriate for a sponsor to deny as "too soon" a claim for a new prescription
with the new dosage because the enrollee will not have enough medication to last until the
originally scheduled refill date.
However, even with these protections, there may exist some period of time in which
beneficiaries with level of care changes have a temporary gap in coverage while an exception is
processed. For this reason, CMS strongly encourages Part D sponsors to incorporate processes
in their transition plans that allow for transition supplies to be provided to current enrollees with
level of care changes.
30.4.8 - Edits for Transition Fills
(Rev. 2, Issued: 07-18-08; Effective/Implementation Date: 07-18-08)
A Part D sponsor must ensure that a new enrollee is able to leave a pharmacy with a temporary
supply of non-formulary Part D drugs without unnecessary delays. Part D sponsors may only
apply certain drug utilization management edits during a beneficiary‟s transition period. Drug
utilization management edits that are appropriate during a beneficiary‟s transition period include
the following:
Edits to help determine Part B vs. Part D coverage;
Edits to prevent coverage of non-part D drugs (i.e., excluded drugs); and
Edits to promote safe utilization of a Part D drug (e.g., quantity limits based on FDA
maximum recommended daily dose; early refill edits).
While Part D sponsors may implement step therapy or prior authorization edits during transition,
they may do so only if such edits are resolved at the point of sale. For example, if a prescriber
writes a prescription for 5mg tablets at 2 tablets daily, Part D sponsors might have dose
optimization edits in place to require the prescription to be changed to 10mg tablets, 1 tablet
daily. However, during transition, Part D sponsors would need to allow pharmacies to override
this edit if the prescriber will not authorize the change at point of sale. In other words, the
beneficiary should leave the pharmacy with sufficient quantity of medication (either 5mg or
10mg tablets) to last the plan allowable days supply, unless the prescriber originally wrote for a
lesser days supply. If the dose optimization edit (or any other step therapy/prior authorization
edit) is overridden at point of sale for transition purposes only, but not permanently, the
beneficiary must be so notified so that he or she can begin the exception process if necessary. As
part of their transition process submissions to CMS, sponsors should describe any edits on
transition drugs and their process for resolving those edits at the point of sale.
CMS notes that although Part D sponsors may implement quantity limits for safety purposes or
drug utilization edits that are based on approved product labeling during a beneficiary‟s
transition period, to the extent that the prescription is dispensed for less than the written amount
due to a plan edit, sponsors must provide refills for that transition supply (at least a 30-day
supply in an outpatient setting and a 31-day supply with multiple refills in an LTC setting). For
example, if a beneficiary presents at a retail pharmacy with a prescription for 1 tablet per day for
30 days and a plan has a quantity limit edit in place that limits the days supply to 14 per
prescription for safety purposes, the beneficiary would receive a 14-day supply (consistent with
the safety edit). At the conclusion of the 14-day supply, the beneficiary should be entitled to
another 14-day supply while he/she continues to pursue an exception with the Part D plan, or a
switch to a therapeutic alternative that is on the plan‟s formulary.
Irrespective of transition, all of these edits are subject to exceptions and appeals. For example, if
a quantity limit edit (based on maximum recommended daily dose) results in the dispensing of a
quantity that is less than indicated on the prescription and is less than the plan allowable days
supply (as determined by the prescribed daily dose), Part D sponsors must ensure that
beneficiaries are made aware of this quantity limit and that an exception is required to obtain a
greater quantity. Part D sponsors must expeditiously process such exception requests so that
beneficiaries will not experience unintended interruptions in medically necessary Part D drug
therapies and/or will not inappropriately pay additional cost-sharing associated with multiple fills
of lesser quantities when the originally prescribed doses of Part D drugs are medically necessary.
A Part D sponsor does retain the authority to deny access to quantities or doses during transition
(i.e., where clearly articulated safety limits established by the FDA or based upon the same peer
reviewed medical literature or well-established clinical practice guidelines used by the P&T
committee in formulary management have been exceeded). Prior to implementing such a denial,
a Part D sponsor should ensure and track that both: (1) an initial transition supply has been
provided up to the maximum limit, and (2) the sponsor has assisted the beneficiary or physician
in filing an exception or that an exception has been processed.
30.4.9 - Cost-sharing Considerations
(Rev. 2, Issued: 07-18-08; Effective/Implementation Date: 07-18-08)
A Part D sponsor may charge cost-sharing for a temporary supply of drugs provided under its
transition process. Cost-sharing for transition supplies for low-income subsidy (LIS) eligibles
can never exceed the statutory maximum copayment amounts. For non-LIS enrollees, a sponsor
must charge cost-sharing based on one of its approved drug cost-sharing tiers (if the sponsor has
a tiered benefit design), and this cost-sharing must be consistent with cost-sharing that the
sponsor would charge for non-formulary drugs approved under a coverage exception.
30.4.10 - Transition Notices
(Rev. 2, Issued: 07-18-08; Effective/Implementation Date: 07-18-08)
A successful transition process is contingent upon informing enrollees and their caretakers about
their options for ensuring that enrollees‟ medical needs are safely accommodated within a Part D
sponsor‟s formulary. An enrollee who receives a temporary supply of a non-formulary Part D
drug at a network pharmacy might simply assume that, by virtue of filling his or her prescription,
that the plan will cover that drug for the remainder of a the contract year. For this reason,
sponsors must provide enrollees with appropriate notice regarding their transition process within
a reasonable amount of time after providing a temporary supply of non-formulary Part D drugs
(including Part D drugs that are on a sponsor‟s formulary but require prior authorization or step
therapy under a sponsor‟s utilization management rules).
Part D sponsors will be required to send a written notice, via U.S. First Class mail, to each
enrollee who receives a transition fill. This standard is consistent with CMS‟ requirement that
other beneficiary communications, including formulary change notices and explanations of
benefits, be sent via U.S. First Class mail. In addition, this notice must be sent to each affected
enrollee within 3 business days of the temporary fill. CMS believes this turnaround is necessary
in order to provide an affected enrollee with sufficient time -- especially in light of CMS‟ 30-day
transition fill policy in the outpatient setting -- to work with his or her prescriber to switch to a
therapeutically equivalent drug that is on the plan‟s formulary or to process an exceptions
request.
The notice must include the following elements:
That the transition supply provided is temporary and may not be refilled unless a
formulary exception is approved;
That the enrollee should work with the sponsor as well as his or her health care provider
to identify appropriate therapeutic alternatives that are on the sponsor‟s formulary and
that will likely reduce his or her costs;
That the member has the right to request a formulary exception, the timeframes for
processing the exception, and the member's right to request an appeal if the sponsor
issues an unfavorable decision; and
The sponsor‟s procedures for requesting a formulary exception.
CMS provides Part D sponsors with a model letter that they may submit to CMS under the file
and use certification process. CMS expects that sponsors will make prior authorization or
exception request forms available upon request to both enrollees and prescribing physicians and
via a variety of mechanisms -- including by mail, fax, email, and on sponsor Web sites. To the
extent that sponsors have the capacity, CMS encourages them to provide any prior authorization
or exception request forms a beneficiary will need to effectuate a transition with the transition
notice.
In addition, CMS strongly encourages point-of-sale notification of enrollees about transition
supplies by pharmacists. CMS has worked with the pharmacy and drug benefit industry,
including the National Council for Prescription Drug Programs (NCPDP), to incorporate a workaround process for using structured payment coding in the message field of billing transaction
responses indicating that a particular fill is a transition supply. This process is consistent with
the current NCPDP 5.1 standard. For more information about Standardized Claims Messaging
see chapter 14, section 50.5.
30.4.11 - Public Notice of Transition Process
(Rev. 2, Issued: 07-18-08; Effective/Implementation Date: 07-18-08)
As a general matter, CMS believes Part D sponsors must make general information about their
transition processes available to beneficiaries in a manner similar to information provided on
formularies and benefit design. It is likely that individuals will base their decision on which
prescription drug best meets their needs on a variety of factors. Having information about a
sponsor‟s transition process in plan enrollment materials and Web sites, as well as on the
Medicare Prescription Drug Plan Finder, may reassure beneficiaries that there will be procedures
in place to assist them in switching to therapeutic alternatives or in obtaining a formulary
exception where appropriate. It will also serve to educate advocates and other interested third
parties – for example, State Medicaid agencies – about sponsor transition processes. CMS will
make plan transition process information available via a required link from the Medicare
Prescription Drug Plan Finder to individual sponsor Web sites.
30.5 - Provider and Patient Education
(Rev. 2, Issued: 07-18-08; Effective/Implementation Date: 07-18-08)
A Part D sponsor must establish policies and procedures to educate and inform health care
providers and enrollees concerning its formulary. See the marketing guidelines on CMS‟ Web
site at http://www.cms.hhs.gov/PrescriptionDrugCovContra /07_RxContracting
_Marketing.asp#TopOfPage for more information on acceptable formulary marketing methods.
Chapter 6 - Appendix A
Common Acute Care Home Infusion Drugs
(This is a tool to assist plans in recognizing common Home Infusion drugs. It does not represent
an exhaustive list of such drugs).
5-HYDROXYTRYPTAMINE 3 (5-HT3)
ANTAGONISTS
AMINO ACIDS
AMINO DERIVATIVE PENICILLINS
AMINOGLYCOSIDES
AZOLE ANTIFUNGALS
BETA-LACTAM, OTHER
CEPHALOSPORIN ANTIBACTERIALS,
1ST GENERATION
CEPHALOSPORIN ANTIBACTERIALS,
2ND GENERATION
CEPHALOSPORIN ANTIBACTERIALS,
3RD GENERATION
CEPHALOSPORIN ANTIBACTERIALS,
4TH GENERATION
COLISTIMETHATE
COLONY STIMULATING FACTORS
DEXTROSE 10%/NACL 0.45%
DEXTROSE 10%
DEXTROSE 10% / NACL 0.2%
DEXTROSE 2.5%
DEXTROSE 2.5% / LACTATED RINGERS
DEXTROSE 2.5% / NACL 0.45%
DEXTROSE 5%
DEXTROSE 5% / LACTATED RINGERS
DEXTROSE 5%/NACL 0.2%
DEXTROSE 5%/NACL 0.225%
DEXTROSE 5%/NACL 0.33%
DEXTROSE 5%/NACL 0.45%
DEXTROSE 5%/NACL 0.9%
TETRACYCLINES
ECHINOCANDIN ANTIFUNGALS
ELECTROLYTES
ERYTHROPOIETINS
EXTENDED SPECTRUM PENICILLINS
GLUCOCORTICOIDS-SYSTEMIC
GLYCOPEPTIDE ANTIBACTERIALS
H1 BLOCKING AGENTS, SEDATING
HEPARIN
LACTATED RINGERS
LINCOMYCIN ANTIBACTERIALS
LIPIDS
LOOP DIURETICS
LOW MOLECULAR WEIGHT HEPARINS
MACROLIDES
MISCELLANEOUS ANTIBACTERIALS
NATURAL PENICILLINS
OPIOID ANALGESICS, LONG-ACTING
OPIOID ANALGESICS, SHORT-ACTING
OXAZOLIDINONE ANTIBACTERIALS
PENICILLINASE-RESISTANT PENICILLINS
POTASSIUM CHLORIDE
PROTON PUMP INHIBITORS
QUINOLONES
SODIUM CHLORIDE SOLUTION
SULFONAMIDES
Chapter 6 – Appendix B
Part D Drugs/Part D Supplementary Drugs
This table provides Part D coverage clarifications for specific products/drugs/drug categories in
accordance with statutory and regulatory requirements for Part D drugs. This is not an
exhaustive list but only addresses those products/drugs/drug categories that have been the subject
of frequently asked questions. Specific products not identified in this table should always be
evaluated against the statutory and regulatory definition of a “Part D drug” before drawing
conclusions from this table. This table does not address Part B versus Part D coverage questions.
Product/Drug/Drug Category
(Listing is NOT all-inclusive)
May be covered under
basic Part D benefit
(when used for
“medically accepted
indication”3 and not
covered under
Medicare Parts A or B)
Agents when used for anorexia,
weight loss, or weight gain
No
Agents when used for cosmetic
purposes or hair growth
No
Agents when used for
symptomatic relief of cough and
colds
No
3
Comments
Prescription drug products being
used to treat AIDS wasting and
cachexia are not considered agents
used for weight gain or agents used
for cosmetic purposes, and
therefore such products are NOT
excluded under such exclusion
categories.
Treatments indicated for psoriasis, acne,
rosacea, or vitiligo are NOT considered
cosmetic.
Cough and cold medications are eligible
to meet the definition of a Part D drug in
clinically relevant situations other than
those of symptomatic relief of cough and
colds. For example, when cough
medications are used for a medically
accepted indication that treats a cough
produced by a medical condition unrelated
to symptomatic cough and cold, CMS
does not consider these cough medications
as excluded drugs [such as the treatment
of cough to alleviate bronchospasm in
asthma].
Medically Accepted Indication for purposes of Part D is an FDA labeled indication or an indication supported by
citation in either the American Hospital Formulary System (AHFS), USP-DI (or its successor publications), or
Drugdex.
Product/Drug/Drug Category
(Listing is NOT all-inclusive)
Antihistamine/Decongestant
Combinations (RX)
Barbiturates
Benzodiazepines
Blood glucose testing strips
May be covered under
basic Part D benefit
(when used for
“medically accepted
indication”3 and not
covered under
Medicare Parts A or B)
Yes, except when being
used for symptomatic
relief of cough and cold
No
No
No
Electrolytes/Replenishers:
*Potassium
Sodium
Calcium
Magnesium
Erectile (ED) Dysfunction Drugs
Yes
No
Extemporaneous Compounds,
including sterile compounding of
IV‟s and total parenteral
nutrition
Fioricet® (Bultalbital, APAP,
Yes, but only costs for
Part D drug components
may be billed under Part
D
No
Comments
NOT directly associated with injection of
insulin
*Potassium Iodide products are excluded
from Part D as Iodine products (minerals)
because they are not used for potassium
supplementation.
Agents when used for the treatment of
sexual or erectile dysfunction, unless such
agents are used to treat a condition, other
than sexual or erectile dysfunction, for
which the agents have been approved by
the Food and Drug Administration. In
addition, ED drugs will meet the
definition of a Part D drug when
prescribed for medically accepted
indications approved by the FDA other
than sexual or erectile dysfunction such as
pulmonary hypertension. However, ED
drugs will not meet the definition of a Part
D drug when used off-label, even if the
off label use is listed in one of the
compendia found in section
1927(g)(1)(B)(i) of the Act.
Dispensing fee may include labor costs
associated with mixing a compounded
drug product that contains at least one Part
D drug component
Part D drug components used solely as
vehicles in a compound may be covered
under Part D (e.g., D5W, Normal Saline)
See Commercially Available Combination
Product/Drug/Drug Category
(Listing is NOT all-inclusive)
May be covered under
basic Part D benefit
(when used for
“medically accepted
indication”3 and not
covered under
Medicare Parts A or B)
Caffeine)
Fioricet® with Codeine
Yes
Fiorinal® (Butalbital, ASA,
Caffeine)
No
Fiorinal® with Codeine
Yes
Fosamax plus D
Yes
Heparin/Saline Flushes
Injectable or IV Iron products
such as Iron Dextran, Iron
Sucrose and Sodium ferric
gluconate
Insulin
No
Yes
Insulin syringes
Yes
IV Solutions for hydration
therapy
Klonopin® (Clonazepam)
Lancets
Less-than-effective DESI Drugs
(and those drugs identical,
related or similar)
Leucovorin Calcium
Librax®
Comments
Product Policy
Section 10.3
See Commercially Available Combination
Product Policy
Section 10.3
See Commercially Available Combination
Product Policy
Section 10.3
See Commercially Available Combination
Product Policy
Section 10.3
See Commercially Available Combination
Product Policy
Section 10.3
See Section 10.6.
Prescription vitamin/mineral product
No
Syringes are NOT covered for injection of
other Part D drugs
Yes
No
No
Benzodiazepine
NOT directly associated with injection of
insulin
See Section 10.9
No
Yes
No
Limbitrol®
(Amitriptyline/chlordiazepoxide)
Yes
Megestrol Acetate and Growth
Hormone when used for AIDS
Yes
Less-than-effective DESI drug
See Commercially Available Combination
Product Policy
Section 10.3
Prescription drug products that otherwise
satisfy the definition of Part D drug are
Product/Drug/Drug Category
(Listing is NOT all-inclusive)
May be covered under
basic Part D benefit
(when used for
“medically accepted
indication”3 and not
covered under
Medicare Parts A or B)
wasting and cachexia
Methadone
Primidone (Mysoline®)
Nonprescription/Over-thecounter (OTC) drugs 4
Omacor®
Phenobarbital
PhosLo®
Polysaccharide Iron Complex
4
Yes, except when
indicated for the
treatment of opioid
dependence
Yes
No, except insulin and
supplies associated with
the injection of insulin
Yes
No
Yes
No
Comments
Part D drugs when used for AIDS wasting
and cachexia if these conditions are
"medically accepted" indications, as
defined by section 1927(k)(6) of the
Social Security Act (SSA), for the
particular Part D drug. Specifically, CMS
does not consider such prescription drug
products being used to treat AIDS wasting
and cachexia as either agents used for
weight gain or agents used for cosmetic
purposes, and therefore such products
cannot be excluded from the Medicare
Prescription Drug Benefit by reference to
section 1927(d)(2) of the SSA.
A Part D drug is partially defined as “a
drug that may be dispensed only upon a
prescription”. . . . Consequently,
Methadone is not a Part D drug when used
for treatment of opioid dependence
because it cannot be dispensed for this
purpose upon a prescription at a retail
pharmacy.
NOT considered a barbiturate
Supplies associated with the injection of
insulin include syringes, alcohol wipes,
insulin pens and pen needles, gauze, and
alcohol
Barbiturate
Prescription vitamin/mineral product
Part D plans may include OTC drugs in step therapy protocols as part of their cost effective drug utilization
management program. However, OTC drugs included in these step therapy protocols are considered administrative
costs, not Part D drugs.
Product/Drug/Drug Category
(Listing is NOT all-inclusive)
Prescription niacin products
May be covered under
basic Part D benefit
(when used for
“medically accepted
indication”3 and not
covered under
Medicare Parts A or B)
Yes
Comments
Prescription niacin products are approved
by the Food and Drug Administration as
safe and effective drugs, are used
therapeutically for the treatment of
dyslipidemia, and do not serve as
nutritional supplements or address a
vitamin deficiency. These products are
used at dosages much higher than
appropriate for nutritional
supplementation. For these reasons, CMS
has concluded that these products should
not be considered prescription vitamins
for purposes of Part D coverage, and
therefore, are not universally excluded
from coverage under the Medicare
prescription drug program.
Prescription vitamins and
mineral products, except prenatal
vitamins and fluoride
preparations
Examples:
B vitamins (Folic Acid,
Cyanocobalamin)
Vitamin K (phytonadione)
Vitamin D (ergocalciferol and
cholecalciferol)
Zinc (sulfate, acetate)
Iron
Iodine
Multivitamin additives for
parenteral nutrition
Smoking cessation drugs (OTC)
Smoking cessation drugs (RX)
Sterile Saline/water for Irrigation
Suboxone®, Subutex®
Vitamin D Analogs (Calcitriol,
doxercalciferol, paricalcitol, and
dihydrotachysterol)
No
No
Yes
Yes
Yes
NOT considered prescription vitamins
Yes
Chapter 6 – Appendix C - Summary of Coverage Policy
MEDICARE PART B VERSUS PART D COVERAGE ISSUES
This document is not a statement or promise of coverage, but rather a high level summary
of when something may be covered under Parts A, B or D, if all other coverage
requirements are met. Appropriate coverage policies and guidance must be consulted for
final coverage determinations.
Introduction
This document provides an overview of outpatient prescription drug coverage policies under
Medicare. Beneficiaries who are inpatients of hospitals or skilled nursing facilities (SNF) during
covered stays may receive drugs as part of their treatment. Typically, the payment for drugs is
bundled into the Medicare Part A payments made to these types of facilities.5 Under the hospice
benefit, beneficiaries receive drugs that are medically necessary for symptom control or for pain
relief. In general, references are seen to five major categories of Medicare Part B drug spending:
1. drugs billed by physicians and typically provided in physicians offices (such as chemotherapy
drugs); 2. drugs billed by pharmacy suppliers and administered through durable medical
equipment (DME), such as respiratory drugs given through a nebulizer; 3. drugs billed by
pharmacy suppliers and self-administered by the patient (such as immunosuppressive drugs and
some oral anti-cancer drugs); 4. separately billable drugs provided in hospital outpatient
departments; and 5. separately billable End Stage Renal Disease (ESRD) drugs such as
erythropoietin (EPO). Regional differences in Part B coverage policies for drugs can occur in
the absence of a national coverage decision. A drug for which coverage is available under Part A
or Part B, as it is being “prescribed and dispensed or administered” with respect to the individual,
is excluded from the definition of a Part D drug and, therefore, cannot be included in Part D
basic coverage.
Medicare Part A and Part B Covered Drugs
Part A/B Covered Drugs Set by Statute
Traditional Medicare (Part A/B) does not cover most outpatient prescription drugs. Medicare
bundled payments made to hospitals and skilled nursing facilities generally cover all drugs
provided during a stay. Medicare also makes payments to physicians for drugs or biologicals
that are not usually self-administered. This means that coverage is usually limited to drugs or
biologicals administered by infusion or injection. However, if the injection is generally selfadministered (e.g., Imitrex), it is not covered.
5
If these drugs are provided as part of a Medicare Part A covered inpatient hospital or skilled nursing facility stay,
they are generally bundled in the Medicare Part A payment to the facility. The exception with regard to inpatient
hospital services is clotting factor which is paid separately. For covered SNF stays certain high cost chemotherapy
drugs are billed separately along with preventive injections (e.g. flu shots). If a beneficiary does not have Part A
coverage, if Part A coverage for the stay has run out or if a stay is non-covered, hospitals and SNFs can be paid for
most categories of Part B covered drugs.
Despite the general limitation on coverage for outpatient drugs under Part B, the law specifically
authorizes coverage for the following:
Durable Medical Equipment (DME) Supply Drugs. These are drugs that require
administration by the use of a piece of covered DME (e.g., a nebulizer, external or
implantable pump). The statute does not explicitly cover DME drugs; they are covered
as a supply necessary for the DME to perform its function. The largest Medicare
expenditures for drugs furnished as a DME supply are for inhalation drugs, which are
administered in the home through the use of a nebulizer (e.g., albuterol sulfate,
ipratropium bromide). The other category of drugs Medicare covers as a DME supply
are drugs for which administration with an infusion pump in the home is medically
necessary (e.g. some chemotherapeutic agents).
Immunosuppressive Drugs. Drugs used in immunosuppressive therapy (such as
cyclosporine) for a beneficiary who has received a Medicare covered organ transplant.
Hemophilia clotting factors. Hemophilia clotting factors for hemophilia patients
competent to use such factors to control bleeding without medical supervision, and items
related to the administration of such factors.
Oral Anti-Cancer Drugs. Drugs taken orally during cancer chemotherapy provided they
have the same active ingredients and are used for the same indications as chemotherapy
drugs that would be covered if they were not self-administered and were administered as
incident to a physician‟s professional service.
Oral Anti-emetic Drugs. Oral anti-nausea drugs used as part of an anti-cancer
chemotherapeutic regimen as a full therapeutic replacement for an intravenous antiemetic drug within 48 hours of chemotherapy administration.
Pneumococcal vaccine. The vaccine and its administration to a beneficiary if ordered by
a physician.
Hepatitis B vaccine. The vaccine and its administration to a beneficiary who is at high or
intermediate risk of contracting hepatitis B.6
Influenza vaccine. The vaccine and its administration when furnished in compliance with
any applicable state law. The beneficiary may receive the vaccine upon request without a
physician‟s order and without physician supervision.
6
High risk groups currently identified include: individuals with ESRD; individuals with hemophilia who received
Factor VIII or IX concentrates; clients of institutions for individuals for the mentally handicapped; persons who live
in the same household as a hepatitis B Virus (HBV) carrier; homosexual men; illicit injectable drug abusers.
Intermediate risk groups include: staff in institutions for the mentally handicapped and workers in health care
professions who have frequent contact with blood or blood-derived body fluids during routine work.
Antigens. These are prepared by a physician (usually an allergist) for a specific patient.
The physician or physician‟s nurse generally administers them in the physician‟s office.
In some cases the physician prepares antigens and furnishes them to a patient who has
been taught to self-administer them at home.
Erythropoietin (EPO). EPO for the treatment of anemia for persons with chronic renal
failure who are on dialysis.
Parenteral Nutrition. Parenteral nutrients are covered under the prosthetic benefit. They
are available to beneficiaries who cannot absorb nutrition through their intestinal tract.
Parenteral nutrition is administered intravenously and is regulated as a drug by the FDA.
Intravenous Immune Globulin Provide in the Home. The Medicare Modernization Act
created a benefit for the provision of intravenous immune globulin (IVIG) for
beneficiaries with a diagnosis of primary immune deficiency disease. Coverage is
provided if a physician determines that the administration of IVIG in the patient‟s home
is medically appropriate. Payment is limited to that for the IVIG itself and does not cover
items and services related to administration of the product.
Part B Covered Drugs in the Context of a Professional Service
Drugs furnished “Incident To” a Physician‟s Service. These are injectable or intravenous drugs
that are administered predominantly by a physician or under a physician‟s direct supervision as
“incident to” a physician‟s professional service. The statute limits coverage to drugs that are not
usually self-administered.7 In order to meet all the general requirements for coverage under the
“incident-to” provision, an FDA approved drug or biological must:
Be of a form that is not usually self-administered (as determined by the A/B Contractor);
Must be furnished by a physician; and
Must be administered by the physician, or by auxiliary personnel employed by the
physician and under the physician‟s personal supervision.
The charge, if any, for the drug or biological must be included in the physician‟s bill and the cost
of the drug or biological must represent an expense to the physician. Drugs and biologicals
furnished by other health professionals may also meet these requirements.
Drugs furnished by a Medicare Advantage Organization “Incident To” a Physician‟s Service. If
a drug could be covered under Part B when furnished by a physician who incurred an expense in
procuring the drug, it could also be covered under Part B in the case of a Medicare Advantage
(MA) plan physician when the MA organization has incurred the expense of procuring the drug,
and the drug is administered to an enrollee in the MA plan. Under Pub. 100-02, Medicare
Benefit Policy Manual, chapter 15, section 60.1, drugs can be covered as “incident to”
7
If a drug is not self-administered by more than 50 percent of Medicare beneficiaries, it is considered “not usually
self-administered”.
physicians‟ services if they “represent an expense to the physician or legal entity billing for the
services or supplies.” Applying this principle to the case of a not-usually self administered drug
administered by an MA plan physician to an MA plan enrollee, if the MA organization supplies
the drug to the plan physician, it is the “legal entity billing” for the drug, since it is the entity that
receives payment from Medicare that includes the cost of such a drug. Consequently, if the MA
organization supplies the drug to the network provider, the MA organization should account for
the drug under its A/B benefits. If a network pharmacy supplies the drug directly to the
beneficiary, the drug must be accounted for under its Part D benefits.
Separately Billable ESRD Drugs. Most drugs furnished by dialysis facilities are separately
billable. The largest Medicare expenditures for such drugs are for erythropoietin (EPO) which is
covered for dialysis beneficiaries when it is furnished by independent and hospital-based ESRD
facilities, as well as when it is furnished by physicians.
Separately billable drugs provided in Hospital Outpatient Departments. Medicare continues to
pay separately for drugs, biologicals and radiopharmaceuticals whose median cost per
administration exceeds an amount (or threshold amount) determined by CMS, while packaging
the cost of drugs, biologicals, and radiopharmaceuticals whose median cost per administration is
less than an amount (or threshold amount) determined by CMS into the procedures with which
they are billed.
Drugs covered as Supplies or - “Integral to a Procedure.” Some drugs are covered as supplies
that are an integral part of a procedure which is a diagnostic or therapeutic service, including
radiopharmaceuticals (both diagnostic and therapeutic) and low osmolar contrast media. Other
examples of drugs covered under the “integral to a procedure” provision include eye drops
administered before cataract surgery.
Blood. Medicare does make separate payment for blood and blood products and these products
are regulated as biological agents by the FDA.
Drugs furnished as a part of a service in these provider settings. 1. Drugs packaged under the
Hospital Outpatient Prospective Payment System (OPPS); 2. Drugs furnished by ESRD facilities
and included in Medicare‟s ESRD composite rate; 3. Osteoporosis drugs provided by home
health agencies under certain conditions; 4. Drugs furnished by critical access hospitals‟ (CAH)
outpatient departments; 5. Drugs furnished by a rural health clinic (RHC); 6. Drugs furnished by
federally qualified health centers (FQHC); 7. Drugs furnished by community mental health
centers (CMHC); 8. Drugs furnished by ambulances; 9. Separately billable drugs provided in
comprehensive outpatient rehabilitation facilities (CORF).
Part D Covered Drugs
Definition of a Part D Covered Drug
A Part D covered drug is available only by prescription, approved by the Food and Drug
Administration (FDA) (or is a drug described under section 1927(k)(2)(A)(ii) or (iii) of the Act),
used and sold in the United States, and used for a medically accepted indication (as defined in
section 1927(k)(6) of the Act). A covered Part D drug includes prescription drugs, biological
products, insulin as described in specified paragraphs of section 1927(k) of the Act, vaccines
licensed under section 351 of the Public Health Service Act and for vaccine administration on or
after January 1, 2008, its administration. The definition also includes medical supplies directly
associated with delivering insulin to the body, including syringes, needles, alcohol swabs, gauze,
and insulin injection delivery devices not otherwise covered under Medicare Part B, such as
insulin pens, pen supplies, and needle-free syringes, can satisfy the definition of a Part D drug.
CMS defines those medical supplies to include syringes, needles, alcohol swabs, gauze, and
those supplies directly associated with delivering insulin into the body.
Part D Supplementary (Excluded) Drugs
The definition of a covered Part D drug excludes any drug for which as prescribed and dispensed
or administered to an individual, payments would be available under Parts A or B of Medicare
for that individual, even though a deductible may apply.
In addition, the definition of a covered Part D drug specifically excludes drugs or classes of
drugs, or their medical uses, which may be excluded from coverage or otherwise restricted under
Medicaid under section 1927(d)(2) of the Act, with the exception of smoking cessation agents.
The drugs or classes of drugs that may currently be otherwise restricted under Medicaid include:
Agents when used for anorexia, weight loss, or weight gain (even if used for a noncosmetic purpose (i.e., morbid obesity)).
Agents when used to promote fertility.
Agents when used for cosmetic purposes or hair growth.
Agents when used for the symptomatic relief of cough and colds.
Prescription vitamins and mineral products, except prenatal vitamins and fluoride
preparations.
Nonprescription drugs.
Covered outpatient drugs which the manufacturer seeks to require as a condition of sale
that associated tests or monitoring services be purchased exclusively from the
manufacturer or its designee.
Barbiturates.
Benzodiazepines.
Agents when used for the treatment of sexual or erectile dysfunction (ED). ED drugs will
meet the definition of a Part D drug when prescribed for medically-accepted indications
approved by the FDA other than sexual or erectile dysfunction such as pulmonary
hypertension. However, ED drugs will not meet the definition of a Part D drug when
used off-label, even when the off label use is listed in one of the compendia found in
section 1927(g)(1)(B)(i) of the Act: American Hospital Formulary Service Drug
Information, United States Pharmacopeia-Drug Information (or its successor
publications), and DRUGDEX Information System. ED drugs meet the definition of a
Part D drug only when used for FDA-approved indications.
While these drugs or uses are excluded from basic Part D coverage, Part D sponsors can
generally include them as part of supplemental benefits, provided they otherwise meet the
definition of a Part D drug. Because over-the-counter (OTC) drugs do not otherwise meet the
definition of a Part D drug, they may not be included as part of supplemental benefits; however,
under certain conditions as part of a plan utilization management program, OTC drugs can be
provided at no cost to enrollees. The cost of these drugs to the Part D sponsor would be treated
as administrative costs under such programs.
Other Resources
1. Pub. 100-02, Medicare Benefit Policy Manual, Chapter 15. “Covered Medical and Other
Health Services”. Section 110
2. Pub. 100-02, Medicare Benefit Policy Manual Chapter 15. “Covered Medical and Other
Health Services” Section 50.2.
3. Reference Guide for Medicare Physician & Supplier Billers, Helping Front Office
Personnel Navigate Medicare Rules for Part B Claims Processing. MedLearn Matters,
Second Edition, October 2006.
Chapter 6 – Appendix C - Summary of Coverage Policy
ATTACHMENT I
Part B Drugs and Part D Coverage Chart
Drugs are covered under Part B in a variety of settings and under a variety of payment
methodologies.
Some drugs are paid on a cost basis or are part of a prospective payment, including: drugs
packaged under the outpatient prospective payment system (OPPS); drugs furnished by
End-Stage Renal Disease (ESRD) facilities and included in Medicare‟s ESRD composite
rate; osteoporosis drugs provided by home health agencies under certain conditions; and
drugs furnished by: critical access hospitals‟ outpatient departments (CAHs); rural health
clinics (RHCs); federally qualified health centers (FQHCs); community mental health
centers (CMHCs); and ambulances.
In addition, there are 13 categories of drugs for which separate payment is made under
Part B8, including: drugs furnished “incident to” a physician‟s service; separately billable
ESRD drugs; separately billable drugs provided in hospital outpatient departments;
durable medical equipment (DME) supply drugs; drugs covered as supplies; drugs used
in immunosuppressive therapy; blood clotting factors; certain vaccines; antigens;
parenteral nutrition; certain oral drugs used in cancer treatment; separately billable drugs
provided in comprehensive outpatient rehabilitation facilities (CORFs); and intravenous
immune globulin provide in the home.9
The following chart groups the various categories of Part B coverage according to the extent
to which they present some ambiguity for billing entities and/or Part D sponsors with regard
to whether coverage should be under Part B or Part D. This ambiguity has different
implications for stand alone Part D sponsors and for Medicare Advantage-Prescription Drug
(MA-PD) Plans (including PACE plans and Section 1876 Cost plans which are treated
similarly to MA-PDs). For stand alone Part D sponsors, the sponsor needs to determine
whether it should make any payment. For MA-PDs, the MA organization needs to determine
whether a payment should be assigned to its Part D spending or to its spending for Part B
services.
8
If these drugs are provided as part of a Medicare Part A covered inpatient hospital or skilled nursing facility stay,
they are generally bundled into the Medicare Part A payment to the facility. The exception with regard to inpatient
hospital services is clotting factor which is paid separately. For covered SNF stays certain high cost chemotherapy
drugs are billed separately along with preventive injections (e.g., flu shots). If a beneficiary does not have Part A
coverage, if Part A coverage for the stay has run out or if a stay is non-covered, hospitals and SNFs can be paid for
most categories of Part B covered drugs.
9
Medicare does make separate payment for blood and blood products under Part A and Part B. Although these
products are regulated as biologicals by FDA, they are not administered in a context that would not be covered
under Part A or Part B. Therefore, generally these products are not Part D drugs. As a result, they are not included
in this discussion.
A. Situations in which a billing entity would have to decide whether for a given drug to bill Part B or Part D
based on characteristics of beneficiary or medical use of the drug.
Relationship between Part B and
Part D Coverage
1. The same drug dispensed by a
pharmacy may be covered under Part
B or Part D depending on the
characteristics of the beneficiary.
2. The same drug provided by an
infusion/DME supplier may be
covered under Part B or Part D
depending on the characteristics of the
beneficiary or method of
administration.
Categories of Separately
Billable Part B Drugs
Drugs used in
immunosuppressive
therapy for a transplant
covered under Medicare.
Comments
Pharmacists would bill Part B or the individual‟s Part D plan
based on information received from the individual or the Part D
plan. Part B would be billed if the individual had a Medicarecovered transplant; otherwise, the Part D plan would be billed.
(Part D plan eligibility systems could contain a marker for
members who had a Medicare covered transplant. This
information could come from a question included on the Part D
sponsor‟s enrollment or coordination of benefit (COB) survey
form.)
In determining whether to pay for an immunosuppressive drug
under Part D, it would not be appropriate for a Part D sponsor to
institute a general policy of requiring a Part B claim rejection, as
a substitute for maintaining information on transplant status and
paying claims based on that information. Such a policy would
be disruptive to beneficiaries and pharmacies and would
unnecessarily increase Part B contractor costs. Instead a prior
authorization requirement would be appropriate.
The supplier would need to know whether the therapy was being
provided because of a non-functioning digestive tract. If so, Part
B would be billed. Otherwise this would be a Part D drug.
a. Parenteral nutrition or
intradialytic parenteral
nutrition (IDPN) (for
individuals with a nonfunctioning digestive tract). It would not be appropriate for Part D sponsors to routinely
require a rejection of a claim under Part B before processing a
Part D claim. Such a policy would be disruptive to beneficiaries
and pharmacies and would unnecessarily increase Part B
contractor costs. However, if a Part D sponsor had evidence
b. Infusible DME supply
drugs
indicating that a particular claim for parenteral nutrition should
be covered under Part B, it would be reasonable to require a
rejection by Part B before processing in this case.
In general, the supplier would bill Part B if the drug was
administered using an infusion pump and bill the Part D plan for
infusion using other methods (e.g., IV push). While professional
services and supplies related to the administration of the infused
drug are not payable under Part D, some coverage may be
available under Part A or B home health benefits, under
Medicaid, or from secondary commercial health benefits.
As a rule, drugs infused using an implantable pump would be
covered under Part B. Drugs infused in the home using an
external pump are covered under Part B if they are included
under the local coverage policy of the applicable Medicare DME
MAC. In the case of a beneficiary in a hospital, or a SNF bed,
(1) who does not have Part A coverage, (2) whose Part A
coverage for the stay has run out or (3) whose stay is noncovered -- infusible DME supply drugs are not covered under
Part B because the law limits coverage under Part B‟s DME
benefit to those items that are furnished for use in a patient‟s
home, and specifies that a hospital or SNF cannot be considered
the beneficiary‟s “home” for this purpose. In this case, coverage
for the drugs would be available under Part D. (see Attachment
II, INFUSION DRUGS, Question 3 for other facilities which
cannot be considered a beneficiary‟s “home” for DME
purposes.)
The fact that coverage is available for a particular drug under
Part B with the use of an infusion pump does not mean that
coverage under Part D using some other method of
administration automatically can be denied. There is no Part B
coverage in the home for infusion drugs administered without an
c. Intravenous immune
globulin (IVIG) provided
in the home for individual
with diagnosis of primary
immune deficiency disease
3. The same drug dispensed by a
pharmacy may be covered under Part
B or Part D depending on how the drug
is used in treatment and the medical
condition for which the drug is being
prescribed.
a. Certain oral
chemotherapy agents used
in cancer treatment for
which there is an infusible
version of the drug.
infusion pump (e.g., IV push). There is also no Part B coverage
in the home for infusion drugs administered with an infusion
pump unless the drug is specifically covered under the local
coverage policy of the applicable Medicare DME MAC.
Therefore, determinations about Part D sponsor payment for
these other methods of administration and for drugs
administered with an infusion pump but not covered by the local
DME MAC policy should be based on the question of whether
the drug is on the sponsor‟s formulary.
The supplier would bill Part B if the diagnosis is primary
immune deficiency disease. IVIG provided in the home for
other diagnoses would be a Part D benefit.
As discussed above, it would not be appropriate, as a general
rule, for Part D sponsors to require a rejection of a claim under
Part B before processing a Part D claim. Prior authorization
programs could be used to ensure medical necessity in
accordance with the Part D sponsor‟s policy.
Pharmacists would need to determine the reason for treatment.
If related to cancer treatment, Part B would be billed; otherwise,
the Part D plan should be billed.
To the extent that a Part B-covered oral anti-cancer drug has no
other medically accepted indication besides cancer treatment,
Part D sponsors should not include these drugs on their
formularies because of Part B coverage. For the drugs that have
other medically accepted indications, prior authorization
programs or other mechanisms to obtain diagnostic information
could be used to ensure appropriate payment.
b. Oral anti-emetics used in 2. Pharmacists would need to determine the reason for treatment.
cancer treatment as a full
If both related to cancer treatment and a full replacement for
replacement for
intravenous administration within 48 hours of cancer treatment,
intravenous treatment.
Part B would be billed; otherwise, the Part D plan should be
billed. NOTE: In order to receive Part B payment, CMS
currently requires that the prescribing physician indicate on the
prescription that the oral anti-emetic is being used “as a full
therapeutic replacement for an intravenous anti-emetic drug as
part of a cancer chemotherapeutic regimen.”
4) The same vaccine may be covered
under Part B or Part D depending on
the characteristics of the beneficiary.
Hepatitis B vaccine for
individuals at high or
intermediate risk.
If based on a prior authorization program or other mechanism to
obtain diagnostic information, a Part D sponsor determined that
a) a Part B-covered oral anti-emetic was being billed, and b) the
drug was being furnished in the context of cancer treatment for
use within 48 hours of cancer treatment, the Part D sponsor
should deny payment. Such drugs dispensed for use after the
48-hour period, or any oral anti-emetic prescribed for conditions
other than the effects of cancer treatment, would be Part D
drugs.
Physicians would need to determine the level of risk of the
individual. If the individual is at high or intermediate risk, Part
B would be billed. For all other individuals, prior authorization
programs could be used to ensure appropriate level of risk.
B. Situation where the form of the drug determines where it is covered.
Relationship between Part B and
Part D Coverage
The same drug provided by a DME
supplier or a pharmacy may be
covered under Part B or Part D
depending on its form (i.e., for use in
nebulizer or in metered dose inhaler)
Categories of Separately
Billable Part B Drugs
Inhalation DME supply
drugs
Comments
Certain inhalation drugs are generally covered under Part B
when used with a nebulizer in the home. These drugs would not
be covered under Part D for use with a nebulizer. However, if
these drugs were delivered with a metered dose inhaler or other
non-nebulized administration, they would be Part D drugs.
In the case of a beneficiary in a hospital, or a SNF bed, (1) who
does not have Part A coverage, (2) whose Part A coverage for
the stay has run out or (3) whose stay is non-covered --
inhalation DME supply drugs are not covered under Part B
because the law limits coverage under Part B‟s DME benefit to
those items that are furnished for use in a patient‟s home, and
specifies that a hospital or SNF cannot be considered the
beneficiary‟s “home” for this purpose. In this case, coverage for
the drugs would be available under Part D. (See Attachment II,
INFUSION DRUGS, Question 3 for other facilities which
cannot be considered a beneficiary‟s “home” for DME
purposes.)
C. Situations where Part B coverage is in the context of another service.
Relationship between Part B and
Part D Coverage
The same drug dispensed by a
pharmacy is covered under Part B if
provided as part of a service in a
provider setting, physician‟s office or
home.
Categories of Separately
Billable Part B Drugs
1. Drugs furnished
“incident to” a
physician service
2. Separately billable
ESRD drugs
3. Separately billable
drugs in HOPDs
4. Separately billable
drugs in CORFs
5. Drugs packaged under
the OPPS
6. Drugs furnished by
ESRD facilities and
included in Medicare‟s
ESRD composite rate
7. Osteoporosis drugs
provided by home
health agencies under
certain conditions
Comments
Generally, if a beneficiary presents at a pharmacy with a script it
would be a Part D drug. The availability of Part B coverage in a
provider setting or physician‟s office should not result in a
refusal of coverage under Part D for drugs dispensed by a
pharmacy. This is the case because coverage is not available
under Part B as the drug is being “prescribed and dispensed or
administered” with respect to the individual. Thus, for example,
while Part B covers certain injectables provided “incident to” a
physician services, injectables dispensed by a pharmacy are not
being “furnished” by a physician and would be Part D drugs.
Part D sponsors should deny claims submitted by members for
Part B-covered injectables if they are administered in a physician
office from a physician‟s supply.
Part D sponsors can subject injectables and infusables that would
be covered under Part B as “incident to” a physician service, to a
prior authorization program. To the extent that the sponsor
determines based on medical literature that there exist serious
8. Drugs furnished by
CAHs outpatient
departments
9. Drugs furnished by
RHCs
10. Drugs furnished by
FQHCs
11. Drugs furnished by
CMHCs
12. Drugs furnished by
ambulances.
safety concerns such that it would go against accepted medical
practice for a particular injectable or infusable to be dispensed
directly to an enrollee, the claim can be denied as not
"reasonable."
Safety-based reasonableness determinations will need to be
made on a case-by-case basis, since circumstances will vary. In
general, however, there are very few instances when an
injectable or infusable drug could not be reasonably dispensed
directly to the patient.
D. Completely unambiguous situations.
Relationship between Part B and
Part D Coverage
1) Unique drugs never dispensed by a
pharmacy.
Categories of Separately
Billable Part B Drugs
Non-DME drugs covered
as supplies (including
radiopharmaceuticals (both
diagnostic and therapeutic)
and low osmolar contrast
media.)
Comments
2) Drugs that would not be covered
under Part D because of Part B
coverage.
1. Blood clotting factors
2. Antigens
Pneumococcal and
influenza vaccines
These categories would not be a Part D benefit and should not be
included on a Part D sponsor‟s formulary.
This category of drugs is those used for diagnostic or therapeutic
purposes in a provider or physician office setting. CMS would
assume that these drugs are not dispensed by pharmacies.
Chapter 6 – Appendix C - Summary of Coverage Policy
ATTACHMENT II
Part B v. Part D Drug Q’s and A’s
EXCLUSIONS RELATED TO MEDICARE COVERAGE UNDER PART A
OR PART B
Question 1 – Should Part D sponsors deny claims for drugs covered under Part A or Part B
of Medicare?
Answer 1 – Drugs, or uses of drugs, for which coverage is available under Part A or Part B are
excluded from the definition of a Part D drug and, therefore, cannot be included in Part D basic
coverage. Unlike the list of supplementary drugs, these drugs, or uses of drugs, cannot be
included in supplemental coverage.
There are two important considerations in determining whether a claim to Part D can be denied
based on the availability of coverage under Part A or Part B of Medicare.
First, the exclusion from the definition of a Part D drug for drugs covered under Parts A or B
is based on whether coverage is available under Part A or Part B for the drug as it is being
“prescribed and dispensed or administered” with respect to the individual. Thus, the same
drug may be covered under different circumstances under both programs and coverage
generally cannot be determined based solely on the drug itself. Since most Part B drug
coverage is available in a provider setting or physician‟s office rather than as drugs dispensed
by pharmacists, there are very limited situations when a drug claim submitted by a pharmacy
should be denied based on the availability of coverage under Part A or Part B.
Second, to the extent a drug could be covered under part B as prescribed and dispensed or
administered, Part D sponsors should view coverage as “available” under Part B regardless of
whether or not an individual is actually enrolled in Part B.
Question 2 – Can a Part D sponsor require that coverage be denied under Part A or Part B
before making payment under Part D?
Answer 2 – Generally, no. In limited instances, prior authorization programs may be necessary
to determine whether the diagnosis of the individual or the particular use of a drug is consistent
with Part D coverage, but it would not be appropriate to routinely require a denial from Part A or
Part B before making payment in lieu of prior authorization. Such a policy would be disruptive
to beneficiaries and pharmacies and would unnecessarily increase Part B contractor costs.
Question 3 - What happens if a Part D sponsor makes payment for a drug and later
determines that the drug was covered under Part B as prescribed and dispensed or
administered?
Answer 3 - If the drug as prescribed and dispensed or administered was covered under Part B on
that day, the payment by the Part D sponsor would have been in error and it should seek recovery
from the billing entity, which should bill Part B instead.
Question 4 - In the case of a newly approved drug that may be covered under one of the
Part B benefit categories, can a Part D sponsor defer a coverage decision until Part B
makes a decision?
Answer 4 - No. Once a drug is approved by the FDA it is a Part D drug. While it is not
automatically a covered Part D drug, that is, it may not be included on a Part D sponsor‟s
formulary, a member could request coverage on an exception basis.
For Medicare Part B coverage, a determination has to be made as to whether the approved drug
fits in a benefit category (e.g., a drug covered as a supply of an external infusion pump used at
home). In the vast majority of cases these determinations are delegated to the individual
contractors. If a drug has a Medicare Part B benefit category and the drug is being “prescribed
and dispensed or administered” as covered under Part B, the drug is no longer a Part D drug.
Question 5 - How will Part D sponsors determine whether a drug is covered under Part B?
Answer 5 - First, it is important to keep in mind that in most cases Part B drug coverage should
not impact payment decisions by Part D sponsors since Part B coverage is generally in a provider
setting or physician's office rather than for drugs dispensed at a pharmacy.
Payment for a particular drug can be denied only if there is Part B coverage as the drug is
prescribed and dispensed or administered. The fact that a claim is received for a drug that is
sometimes covered by Part B is not a basis for denial since the Part D sponsor would have to
determine whether the drug is being prescribed and dispensed or administered on the basis under
which Part B coverage is available. This will generally involve interaction between the Part D
sponsor and the Medicare Part B contractor with jurisdiction in that geographic area for that
drug.
With regard to new drugs, as decisions are made nationally or by individual A/B contractors, this
information will be available on the CMS and contractor Web sites.
INFUSION DRUGS
Question 1 - Since Part B covers infusion drugs in the home, can a Part D sponsor reject
any claim for home infusion?
Answer 1 – No. Part B coverage is generally limited to a number of drugs that require the use of
an infusion pump in the home. Any agents administered in the home via IV drip or push
injection would be covered under Part D. This could include the same drugs that are covered
under Part B when furnished through the use of an infusion pump.
Question 2 – Does Part B cover drugs that require an external infusion pump in the case of
a beneficiary in a hospital or SNF bed who does not have Part A coverage, whose Part A
coverage for the stay has run out or whose stay is non-covered?
Answer 2 – No, drugs that require an external infusion pump are not covered under Part B under
those circumstances because the law limits coverage under Part B‟s DME benefit to those items
that are furnished for use in a patient‟s home, and specifies that a hospital or SNF cannot be
considered the beneficiary‟s “home” for this purpose.
Question 3 - What other facilities cannot be considered the beneficiary’s “home” under the
law for purposes of receiving the Medicare DME benefit?
Answer 3 – In addition to a hospital, a SNF or a distinct part SNF, the following facilities cannot
be considered a home for purposes of receiving the Medicare DME benefit:
a nursing home that is dually-certified as both a Medicare SNF and a Medicaid nursing
facility (NF);
a Medicaid-only NF that primarily furnishes skilled care;
a non-participating nursing home (i.e., neither Medicare or Medicaid) that provides primarily
skilled care; and
an institution which has a distinct part SNF and which also primarily furnishes skilled care.
Question 4 - If the infusion services are furnished in an outpatient provider setting, can a
Part D sponsor deny a claim?
Answer 4 – Yes. If a physician office or hospital outpatient department bill for infusion
administered in those settings, the claim should always be denied because of coverage in those
settings under Part B.
Question 5 – Since Part B covers intravenous immune globulin (IVIG) provided in the
home, should a Part D sponsor deny claims for this drug?
Answer 5 – It depends. Part B coverage for IVIG in the home is for individuals whose diagnosis
is primary immune deficiency disease. Part D would provide coverage for IVIG in the home for
all other medically accepted indications. Prior authorization requirements could be used to
ensure appropriate payment in accordance with the Part D sponsor‟s medical necessity criteria.
It would not be appropriate to routinely require a rejection of a claim under Part B before
processing a Part D claim. Such a policy would be disruptive to beneficiaries and pharmacies
and would unnecessarily increase Part B contractor costs.
Question 6 – Since Part B covers parenteral nutrition under certain circumstances, should
Part D sponsors deny these claims?
Answer 6 – It depends. Part B coverage for parenteral nutrition is limited to individuals with a
non-functioning digestive tract. So if parenteral nutrition is being provided based on this
condition, the claim should be denied. For all other medically accepted indications, coverage
would be under Part D. Prior authorization programs could be used to ensure appropriate
payment. As a general policy, it would not be appropriate to require a rejection of a claim under
Part B before processing a Part D claim. However, if a Part D sponsor had a reasonable basis for
assuming that a particular claim would be covered under Part B, it could require a rejection by
Part B before processing.
ORAL ANTI-CANCER DRUGS
Question 1 - With regard to oral anti-neoplastics, we understand that if they have an IV
form, they are covered under Part B. It is our thinking then, that we could exclude those
that are used solely for cancer under this premise since they would be covered under Part
B.
Answer 1 – Yes. Part D sponsors should not include on their formularies the oral anti-cancer
agents covered by Part B whose only medically accepted indication is as an anti-cancer agent.
They should always deny claims for these drugs. For the drugs that have other medically
accepted indications, Part D sponsors should deny claims for these drugs when used for cancer
treatment but when these drugs are used for other indications they would be Part D drugs. The
use of the drug could be determined through a prior authorization program.
ORAL ANTI-EMETICS
Question 1 - Do pharmacies bill oral anti-emetics under Part B or Part D?
Answer 1 - It depends. Before billing either Part B or Part D, pharmacists would need to
determine the reason for treatment. If it is related to cancer treatment and is a full replacement
for intravenous administration within 48 hours of cancer treatment, Part B would be billed;
otherwise, Part D should be billed.10 In order to receive Part B payment, CMS currently requires
that the prescribing physician indicate on the prescription that the oral anti-emetic is being used
“as a full therapeutic replacement for an intravenous anti-emetic drug as part of a cancer
chemotherapeutic regimen.”
If (based on a prior authorization program) a Part D sponsor determines that a Part B-covered
oral anti-emetic drug is being billed, and that the drug is being furnished in the context of cancer
treatment for use within 48 hours of such treatment, the Part D sponsor should deny payment
since coverage is available under Part B. Such drugs dispensed for use after the 48-hour period,
or any oral anti-emetic prescribed for conditions other than treatment of the effects of cancer
treatment, would be Part D drugs.
IMMUNOSUPPRESSANTS
Question 1 - Do pharmacies bill oral immunosuppressants under Part B or Part D?
10
There may be some local A/B contractor variance regarding the 48 hour interval for the oral anti-emetics
granisetron and dolasetron. Part D sponsors should contact their local A/B contractor for more information
regarding these drugs.
Answer 1 - It depends. Pharmacists would bill Part B or the individual‟s Part D plan based on
information received from the individual or sources substantiating the patient‟s transplant. Part
B would be billed if the individual had a Medicare covered transplant; otherwise, the Part D plan
would be billed.
INJECTABLES
Question 1 - Can claims submitted by pharmacies for injectable drugs be denied based on
Part B coverage in a physician office “incident to” a physician service?
Answer 1 – No. The exclusion from the definition of a Part D drug of drugs covered under Parts
A or B is based on whether coverage is available under Part A or Part B for the drug as it is being
“prescribed and dispensed or administered” with respect to the individual. Thus, the same drug
may be covered under different circumstances under both programs. As a result, coverage
cannot generally be determined based solely on the drug itself.
The fact that an injectable is covered under Part B in a physician‟s office or hospital outpatient
department or other provider setting does not mean that these drugs should be excluded from the
Part D sponsor‟s formularies, or that a Part D sponsor can deny a claim from a pharmacy based
on availability of Part B coverage in a physician‟s office. If, however, a member submits an outof-network claim for an injectable drug administered in-office from a physician‟s supply, and
this drug is covered in that setting by the Part B contractor for that area, such a claim should be
denied by the Part D sponsor based on Part B coverage. (Of course, an MA-PD plan would not
deny such a claim, but rather pay it under the A/B benefit.)
Question 2 - An injectable drug that a Medicare contractor considers to be usually not selfadministrable (e.g., injectable chemotherapy drugs) can only be covered under Part B as
“incident to” a physician service if it is obtained by a physician and administered as part of
a physician service. Can Part D sponsors require prior authorization for these medications
when dispensed by a pharmacy? If the sponsor determines that the drug will be
administered in a physician office, can the sponsor deny the claim because the practice of
the patient taking the drug to the physician’s office for administration is unsafe and
because coverage is available under Part B if the physician obtained and administered the
drug?
Answer 2 - Part D sponsors determine the scope of their own prior authorization programs
subject to CMS review to ensure that such programs have a sound medical basis and do not
discriminate against beneficiaries with certain medical conditions.
To the extent that a sponsor‟s prior authorization program applies to injectables and infusables
that would be covered under Part B as “incident to” a physician‟s service, and the sponsor
determines based on medical literature that there exist serious safety concerns such that it would
go against accepted medical practice for a particular injectable or infusable to be dispensed
directly to a member, the claim can be denied as not "reasonable." Thus, the dispensing of that
particular drug to that member may be excluded by the Part D sponsor under Section
1862(a)(1)(A) of the Social Security Act as applied to Part D under 1860D-2(e)(3)(A) of the Act.
This same safety concern would not exist, however, if the claim for the drug was being submitted
by an infusion supplier.
Safety-based reasonableness determinations will need to be made on a case-by-case basis, since
circumstances will vary. In general, there are very few instances when an injectable or infusable
drug could not be reasonably dispensed directly to the patient. All drugs are in some sense
hazardous. This is not a unique characteristic of injectables and infusables.
Some situations that would present safety concerns in dispensing directly to a patient who is
transporting the drug to a physician‟s office for administration include:
The drug itself presents a bona fide public safety hazard (e.g., highly radioactive substance or
an environmentally hazardous chemotherapeutic agent) that requires chain of custody
handling to ensure use of appropriate equipment (i.e., safety hood) or persons of special
qualifications.
The drug requires special handling to preserve biologic activity and the patient is incapable
or unwilling to do so. (For instance, a vaccine that must be kept frozen could be a problem if
the patient had to transport it a long distance in summer heat.)
The patient presents a high risk of diversion or inappropriate use. (For instance, giving a
heroin addict a vial of morphine.)
The patient has demonstrated unreliability, aversion, or unwillingness in transporting drugs
to his doctor‟s office. (For instance, with respect to dispensing injectable psychiatric meds.)
In the absence of a serious safety concern based on the individual situation, however, there is no
basis for denying a prescription presented at a pharmacy based on the availability of Part B
coverage in another setting (e.g., physician office).
Finally, it is CMS‟ understanding that the practice of “brown-bagging” drugs is opposed by
medical societies. CMS continues to urge them to reinforce this message with their members.
Question 3 – Most Medicare Advantage plans treat most non-self-injectables as a medical
benefit. Do they have to treat them as a Part D benefit?
Answer 3 - If an injectable drug is covered under Part B in a provider or physician office setting,
it will continue to be covered under Part B in those settings. If an injectable drug is not covered
in a provider setting (e.g., determined by the contractor to be usually self-administered), then it
will need to be covered under Part D. In addition, claims for non-Part-B-covered injectables
whether usually self-administered or not, when dispensed and submitted by pharmacists could be
covered under Part D. However, Part D plans could establish medical necessity criteria for
limiting coverage of injectable drugs in physician offices.
Question 4 - What are Part D sponsors to do if their region includes multiple A/B
contractor areas and these contractors have differing policies with regard to injectable
drugs?
Answer 4 – A Part D sponsor will have to modify its coverage based on the variation in Part B
coverage across contractor areas within its region. That is, assume that there are two contractor
areas within a Part D sponsor‟s region, Contractor A and Contractor B. Further assume that
Contractor A covers injectable X when furnished in a physician office but Contractor B does not.
As a result of this difference in Part B coverage, injectable X is a Part D drug when furnished in
a physician office for members residing in Contractor B‟s area, but not in Contractor A‟s area.
In either area, injectable X would be covered under Part D if dispensed by a pharmacy.
For MA-PD plans, rules for selecting local coverage determinations apply. That is, if a local MA
plan‟s service area includes more than one contractor area, the plan may seek approval from
CMS to apply uniformly to all of the plan‟s enrollees local coverage policies that are the most
beneficial to enrollees. Regional MA plans can select a set of local coverage policies to apply
uniformly to their enrollees without CMS pre-approval. In either case, if the selected contractor
covers injectable X, the MA-PD would treat injectable X as a basic A/B benefit. If the selected
contractor does not cover injectable X, the MA-PD would treat it as a Part D drug.
Question 5 –What about new injectable drugs?
Answer 5 - As new injectables are approved by FDA, Part B contractors or CMS would continue
to make coverage decisions regarding drugs provided incident to a physician‟s service based on
whether the drug is “not usually self-administered.” Injectables not covered under Part B as
incident to a physician‟s service would become Part D drugs. However, there is no requirement
for Part D sponsors to provide coverage of non-Part-B-covered drugs in the physician office
setting if the drugs can be safely self-administered and there is no medical necessity for
administration in that setting.
INHALATION DRUGS
Question 1 - Can claims submitted by a pharmacy for inhalation drugs delivered through
metered-dose inhalers be denied based on Part B coverage of inhalation drugs used with a
nebulizer?
Answer 1– No. Since there currently is no coverage under Part B for inhalation drugs delivered
through metered-dose inhalers and dispensed by a pharmacy, these drugs would be covered
under Part D.
Question 2 – Does Part B cover inhalation drugs used with a nebulizer in the case of a
beneficiary in a hospital or SNF bed who does not have Part A coverage, whose Part A
coverage for the stay has run out or whose stay is non-covered?
Answer 2 – No, inhalation drugs used with a nebulizer are not covered under Part B under those
circumstances because the law limits coverage under Part B‟s DME benefit to those items that
are furnished for use in a patient‟s home, and specifies that a hospital or SNF cannot be
considered the beneficiary‟s “home” for this purpose. (See list above (INFUSION DRUGS,
Question 3) for other facilities which cannot be considered a beneficiary‟s “home” for DME
purposes.
VACCINES
Question 1 – Are all vaccines be covered under Part D?
Answer 1 – No. There are a number of vaccines that remain covered under Part B. For instance,
pneumococcal and influenza vaccines are not covered under Part D because of Part B coverage.
Hepatitis B vaccine is covered under Part B for individuals at high or intermediate risk; for all
other individuals, it would be covered under a Part D benefit. Part B also covers certain vaccines
reasonable and necessary for the treatment of an illness or injury. All other currently available
vaccines and all future preventative vaccines could be covered under Part D.
Question 2- If a Part D sponsor determines through a prior authorization program that a
hepatitis B vaccine is going to be administered by a physician can the Part D sponsor deny
the claim based on Part B coverage in the setting?
Answer 2 – No. Since the Part B benefit for hepatitis B vaccine is separate from the “incident
to” benefit, the determination about whether it is a Part D drug depends solely on characteristics
of the beneficiary. However, if the Part D sponsor determines based on Medicare Part B
guidelines that the individual is at high or medium risk for hepatitis B, the claim should be
denied. For all other individuals, the vaccine would be a “Part D drug”.
Question 3 - Medicare Part B covers hepatitis B vaccine for high and intermediate risk
groups if ordered by a doctor of medicine or osteopathy, how are these groups defined?
Answer 3 – The high risk groups for whom vaccination is covered include:
•
•
•
•
•
•
Individuals with End stage renal disease (ESRD);
Individuals with hemophilia who received Factor VIII or IX concentrates;
Clients of institutions for individuals for the mentally handicapped;
Persons who live in the same household as a hepatitis B Virus (HBV) carrier;
Homosexual men; and
Illicit injectable drug abusers
Intermediate risk groups include:
•
•
Staff in institutions for the mentally handicapped; and
Workers in health care professions who have frequent contact with blood or bloodderived body fluids during routine work.
ANTIGENS
Question 1 – If a pharmacy submits a claim for antigens should a Part D sponsor make
payment?
Answer 1 – No. Antigens are covered only under Part B.
BLOOD CLOTTING FACTORS
Question 1 – If a pharmacy submits a claim for blood clotting factors should a Part D
sponsor make payment?
Answer 1 – No. Blood clotting factors are covered under Part A and Part B.
Chapter 6 – Appendix C - Summary of Coverage Policy
ATTACHMENT III
Web sites for Part B Coverage Information
Pub. 100-04, Medicare Claims
Processing Manual
http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=99&sortByDID=1&sortOrder=ascending&itemID=CMS018912&intNumPerPage=10
Pub. 100-02, Medicare Benefit
Policy Manual
http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=99&sortByDID=1&sortOrder=ascending&itemID=CMS012673&intNumPerPage=10
Medicare Coverage Database
http://www.cms.hhs.gov/mcd/search.asp
AB MAC and DME MAC contact
information
http://www.cms.hhs.gov/apps/contacts/
Chapter 6 - Appendix D
(Rev. 10, Issued: 02-19-10, Effective/Implementation Date: 03-01-10)
The Most Commonly Prescribed Drug Classes for the Medicare Population
3- HYDROXY- 3- METHYLGLUTARYL COENZYME
A (HMG COA) REDUCTASE INHIBITORS
5 ALPHA- REDUCTASE INHIBITORS
ADENOSINE DIPHOSPHATE P2Y12 INHIBITORS
ALPHA 1- ADRENERGIC BLOCKING AGENTS
ALPHA- ADRENERGIC AGONISTS
ALPHA- ADRENERGIC AGONISTS, OPHTHALMIC
ANGIOTENSIN II RECEPTOR ANTAGONISTS
HORMONAL AGENTS, STIMULANT/
REPLACEMENT/ MODIFYING (THYROID)
INSULIN, INTERMEDIATE- ACTING
INSULIN, LONG- ACTING
INSULIN, SHORT- ACTING
LAXATIVES
LEUKOTRIENE RECEPTOR ANTAGONISTS
LINCOMYCIN ANTIBACTERIALS
ANGIOTENSIN- CONVERTING ENZYME (ACE)
INHIBITORS
LOCAL ANESTHETICS
ANTI- INFLAMMATORIES, INHALED
CORTICOSTEROIDS
LOOP DIURETICS
ANTIARRHYTHMICS - CLASS IA/ II/ III/ IV
LTC DRUGS- AMINO DERIVATIVE PENICILLINS
(CHEWABLE)
ANTICHOLINERGICS
ANTICOAGULANTS
LTC DRUGS- AMINO DERIVATIVE PENICILLINS
(ORAL LIQUID)
LTC DRUGS- ANTIEMETICS (SUPPOSITORY)
ANTIDEPRESSANTS, OTHER
LTC DRUGS- BRONCHODILATORS,
SYMPATHOMIMETIC (SHORT- ACTING
SOLUTION)
ANTIEMETICS
ANTIHERPETIC AGENTS
ANTISPASMODICS, GASTROINTESTINAL
LTC DRUGS- HISTAMINE2 (H2) BLOCKING
AGENTS (ORAL LIQUID)
LTC DRUGS- LOOP DIURETICS (ORAL LIQUID)
LTC DRUGS- MACROLIDES (ORAL LIQUID)
ANTISPASMODICS, URINARY
ANTISPASTICITY AGENTS
ANXIOLYTICS
ATYPICALS
AZOLE ANTIFUNGALS, ORAL
LTC DRUGS- NONSTEROIDAL ANTIINFLAMMATORY DRUGS (ORAL LIQUID)
MACROLIDES
MISCELLANEOUS ANTIBACTERIALS
NICOTINIC ACID
NITROFURAN ANTIBACTERIALS
BETA- ADRENERGIC BLOCKING AGENTS WITH
VASODILATING PROPERTIES
NONSELECTIVE BETA- ADRENERGIC BLOCKING
AGENTS
BETA- ADRENERGIC BLOCKING AGENTS,
OPHTHALMIC
BETA- LACTAM, PENICILLINS
BIGUANIDES
NONSTEROIDAL ANTI- INFLAMMATORY DRUGS
OPHTHALMIC AMINOGLYCOSIDES
OPHTHALMIC ANTI- ALLERGY AGENTS
BIPOLAR AGENTS
BISPHOSPHONATES, ORAL
BOWEL PREPARATION PRODUCTS
OPHTHALMIC PROSTAGLANDIN AND
PROSTAMIDE ANALOGS
OPIOID ANALGESICS, LONG- ACTING
OPIOID ANALGESICS, SHORT- ACTING
BRONCHODILATORS, ANTICHOLINERGIC
OPIOID ANALGESICS, SHORT- ACTING WITH
APAP
BRONCHODILATORS, SYMPATHOMIMETIC
(LONG- ACTING)
PHOSPHODIESTERASE III/ ADENOSINE UPTAKE
INHIBITORS
BRONCHODILATORS, SYMPATHOMIMETIC
(SHORT- ACTING)
POLYENE ANTIFUNGALS
CALCIUM CHANNEL BLOCKING AGENTS (NONDIHYDROPYRIDINES)
CALCIUM CHANNEL MODIFYING AGENTS
POTASSIUM SUPPLEMENTS
POTASSIUM- SPARING DIURETICS
CARDIOSELECTIVE BETA- ADRENERGIC
BLOCKING AGENTS
CARDIOVASCULAR AGENTS, OTHER
PROGESTINS
PROTECTANTS, GASTROINTESTINAL
CEPHALOSPORIN ANTIBACTERIALS, 1ST
GENERATION
PROTON PUMP INHIBITORS
CEPHALOSPORIN ANTIBACTERIALS, 2ND
GENERATION
CHOLESTEROL ABSORPTION INHIBITORS
CHOLINESTERASE INHIBITORS
QUINOLONES
SEDATIVES/ HYPNOTICS
SELECTIVE ESTROGEN RECEPTOR MODIFIERS
DIHYDROPYRIDINES
DOPAMINE AGONISTS, NONERGOT
DOPAMINE PRECURSORS
ESTROGENS
FIBRATES
SEROTONIN/ NOREPINEPHRINE REUPTAKE
INHIBITORS
SKELETAL MUSCLE RELAXANTS
SMOKING CESSATION AGENTS
SODIUM CHANNEL INHIBITORS
SULFONAMIDES
GAMMA- AMINOBUTYRIC ACID (GABA)
AUGMENTING AGENTS
GLUCOCORTICOIDS, OPHTHALMIC
GLUCOCORTICOIDS- SYSTEMIC
SULFONYLUREAS
TETRACYCLINES
THIAZIDE DIURETICS
GLUCOCORTICOIDS- TOPICAL- MEDIUM
POTENCY
GLUCOCORTICOIDS-TOPICAL-HIGH POTENCY
GLUTAMATE PATHWAY MODIFIERS
THIAZOLIDINEDIONES
TRICYCLICS
VASODILATORS, DIRECT- ACTING ARTERIAL
GLUTAMATE REDUCING AGENTS
VASODILATORS, DIRECT- ACTING ARTERIAL/
VENOUS
HISTAMINE1 (H1) BLOCKING AGENTS, MILDLY/
NON- SEDATING
HISTAMINE2 (H2) BLOCKING AGENTS
XANTHINE OXIDASE INHIBITORS
Transmittals Issued for this Chapter
Rev #
Issue Date
R10PDB 02/12/2010
R2PDB
07/18/2008
Subject
Chapter 6 Part D Drugs and Formulary
Requirements
Initial release of chapter
Impl Date
03/01/2010
CR#
N/A
07/18/2008
N/A